New affordable housing projects will rely on PPPs

Saudi Arabia, Bahrain and Kuwait are all in desperate need of more affordable housing.

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Public-private partnerships (PPPs) will be the norm for forthcoming affordable and social housing projects in the GCC, according to industry experts.

In an interview with Construction Week, the Standard Chartered Bank’s head of commercial real estate in the Middle East, Fergal Harris, said there would be a move towards PPPs as a means of ensuring quality building on government-led housing initiatives.

At least two housing projects planned for Bahrain, being launched to cater for the growing population and increasing demand for affordable housing, are currently looking at PPPs with a view to guaranteeing efficient programme management.

This year will see the start of several affordable housing projects in the region, particularly in Bahrain, Kuwait and Saudi Arabia, in response to the need for property replacement as well as new properties located in more suburban areas.

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“There is and there will be, a move towards PPP,” said Harris. “The main reason for this is so that the government can outsource the professional management of large scale residential projects to the private sector.

“The truth is that ministries of housing cannot sufficiently handle these projects, because they don’t have the in-house expertise.”

He added: “Outsourcing therefore puts a greater discipline around the physical construction, in terms of quality, delivery, general management, and we think it’s good for the government to outsource rather than create massive internal housing departments.”

To ensure PPPs work successfully, Harris advises governments to seek contractors with experience of large scale projects and who are familiar with local laws and customs, so as not to defeat the purpose of having a PPP in the first place.

As well as launching new housing projects, Bahrain will also be hosting an affordable housing summit towards the end of September, which will bring experts together to discuss how PPP schemes can be executed in the most effective way.