PPP law will accelerate infra development in Qatar
Qatar’s public-private partnership (PPP) law will accelerate infrastructure development, argue legal experts Laura Warren and Alexander Whyatt from Clyde & Co
In 2015, Qatar signed its first true public-private partnership (PPP) project with a Japanese-led consortium to develop the $3bn (QAR10.9bn) water and power project at Ras Laffan.
Qatar is now in the process of drafting a new law to facilitate and nurture its fledgling PPP sector, and to provide a strong legal framework for the efficient delivery of future PPP projects.
Since 1994, when Oman procured the region’s first PPP project, the Al Manah power plant, GCC member states have successfully launched a number of PPP projects in sectors including roads, bridges, water, power, waste, and accommodation.
The text of the new law has not yet been published. However, Qatar’s Ministry of Economy and Commerce has stated that it will submit the draft PPP law to the cabinet in August 2016. The legislation is scheduled to be implemented by the end of the year – a fast-track timetable.
PPPs can offer clear advantages over more traditional procurement routes, including long-term financial certainty, knowledge integration, and economic diversification. It may be these factors that will help Qatar realise the ambitious plans for growth in its National Vision 2030, and address the medium- and long-term needs of its growing population.
Many countries implement PPP projects in order to ease financial burdens. Although this may be a factor, it is thought that the driving influences behind Qatar’s efforts are the acceleration of infrastructure development, and the closer public sector integration of private sector experience in the construction and operation of these projects.
Saud al-Attiyah, an official at the Ministry of Economy and Commerce, is quoted saying that PPP opportunities will be made available in sport, health, and education, including a programme for the construction of 10 to 12 public schools.
Encouragingly, a recent study by Markab Advisory found that GCC countries plan to invest as much as $2tn in PPPs and infrastructure during the course of the next decade, and that more efficient procurement processes, such as PPP, might be worth as much as $30bn to Qatar over the same period.
The country’s current PPP-related efforts may only be the start.
The above article was written by Laura Warren, construction and projects partner, and Alexander Whyatt, associate, at Clyde & Co’s Qatar office.