DUBAI TURNS TO PUBLIC-PRIVATE PARTNERSHIP
posted on Oct 5, 2015
05 October 2015 – Dubai, UAE: The 11th MEED MENA Rail & Metro Summit kicked off today, held under the patronage of H.E. Dr. Abdullah Al Nuaimi, Minister of Public Works UAE and hosted by the Federal Transport Authority.
Industry leaders gathered to discuss and debate the considerable opportunities and challenges that the MENA region presents for the rail sector. High on the agenda was the changes in law and the impact they would have on the industry.
The recent introduction of a new public-private partnership (PPP) law in Dubai increases the number of available options for funding infrastructure projects in, which have been traditionally financed wholly by the government.
The first scheme that will be executed under the new PPP law is the Union Oasis, a mixed-use project to be built above the Dubai Metro’s Union Square station, which was conceived by the Dubai Roads and Transport Authority (RTA).
The RTA has planned as early as in 2011 to tap private funds for 30 per cent of its projects. The Union Oasis towers will be built based on the new law’s recommended 30-year concession agreements.
“PPP is considered a logical route for the emirate, which has multi-billion dollar schemes lined up, ranging from transport to power plants,” says Jennifer Aguinaldo, transport editor at MEED. “Dubai’s main government related entities need new sources of funding for these projects.”
The new law is considered horizontal, which covers multiple sectors, unlike the earlier law of 2006 that only regulates power and water PPPs.
Unlike the PPP law for the emirate’s power and water sector, the new PPP law does not require the Dubai government to provide a sovereign guarantee to PPPs. Supplementary regulations are also required to determine whether the special purpose vehicles (SPV) created to develop PPPs can be based in free zones and if foreign investors will be allowed to have more than 49 per cent ownership.
Dubai’s adoption of a new horizontal PPP law follows after the implementation of similar laws in Kuwait and Bahrain. It also paves the way for similar laws to be introduced across the region.
According to Trevor Butcher, Head of Middle East Finance & Projects at DLA Piper, the PPP Law is “an overwhelmingly positive step forward for the development of a PPP market in Dubai. It gives government entities the freedom to define appropriate tender processes and contract terms outside of the constraints of the existing tender laws that simply don’t work for PPPs.”
Qatar is currently seeking advisors in a bid to develop its own PPP framework while Oman is understood to be considering the adoption of PPP for some segments of its national railway project.
“The most immediate value that can be derived from the Dubai’s new PPP law will be in helping the RTA develop its new projects in time for the Dubai Expo which opens in October 2020. That is why this topic will be discussed in detail in the finance and funding panel on 5 October at MEED’s MENA Rail & Metro Conference,” says MEED Events chairman Edmund O’Sullivan.
The summit is sponsored by EY (Gold Sponsor), Hitachi (Gold Sponsor), Louis Berger (Gold Sponsor), Alstom (Silver Sponsor), Bentley (Silver Sponsor), Comply Serve (Silver Sponsor), Vossloh (Lunch Sponsor), Parsons (Bronze Sponsor), DLA Piper (Bronze Sponsor) and Siemens (Bronze Sponsor), Hill International (Conference Sponsor), AREP (Exhibitor), Soldata (Exhibitor), Lafarge (Exhibitor) and Simmons & Simmons (Official Wifi Sponsor).
About the MENA Rail and Metro Summit
MEED's annual MENA Rail & Metro Summit is the largest project focussed gathering of experts working in GCC and North African rail and metro projects. Now in its 11th year, the summit is a platform to build momentum in moving the $350bn urban and regional rail transport goals forward.
It incorporates a focused agenda exploring projects and key issues on projected rail plans, operability, GCC integration and in technical best practices and project delivery. This year the summit is being held under the patronage of H.E. Dr. Abdullah Belhaif Al-Nuaimi, Minister, Ministry of Public Works and the Federal Transport Authority of the UAE.
Visit www.meedrailprojects.com for more information.
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