Dubai: The transition to jointly owned public-private initiatives for Dubai’s infrastructure development would take time to evolve. It also underlines the magnitude of the change that Dubai seeks with the new law that creates a key role for private sector in new infrastructure projects.
“Lead times tend to be longer with any PPP when compared to traditional project delivery,” said Christopher Seymour, Head of Middle East Markets at the project management consultancy Arcadis. “However, this needs to be considered against the fact that the relationship with the provider is far longer than just the construction period — sometimes up to 30 years — since the operation period is all part of the deal.
“This can lead to some frustration at the apparently slow pace of delivery. And for this reason, where the investment is needed quickly or for a short term objective, the PPP may not be the best option.”
Looking at regional markets where PPPs have proved popular, the main use has been in building roads and water/sewage plants, but also on airports and solar and conventional power projects.
“It is a very different approach with transfer of risk and relationships at variance to a traditional project,” said Seymour. “Hence, expertise and processes from the international community will provide valuable insight as the UAE, in the face of low oil prices, looks seriously at the PPP.
“The PPP, used extensively in other parts of the world, is a procurement whereby private sector funds build and operate a government asset on a long-term agreement in return for a regular payment. It does demonstrate certain advantages and is likely to be a key consideration for many infrastructure projects going forward.”
