Dubai: Dubai is curbing the establishment of state-related entities to ensure they aren’t crowding the private sector and holding back economic development.
Additional state-related firms will only be created to fulfil a national security requirement or a strategic government need, according to a statement by Dubai’s Executive Council. They will only be created if the private sector is unable or unwilling to provide the services or goods needed or if the government is better-placed to offer them.
New government companies must operate without legislative favouritism or any additional advantages that would give them an edge over private-sector peers.
The Dubai Government has already launched efforts to redefine the role of public and private sectors in real estate. A higher committee — currently with representation from government owned developers — will work on demand and supply forecasts, and, industry sources believe, also give guidance on areas where private players can take on more responsibilities.
“There are already alliances at the government developer level — maybe similar ones can be created with private players,” said a source. “This way there can be better utilisation of the land held by some of the biggest players.
“It can also be a strategy for the government to exit in full from some of the assets they hold.”
Dubai already has the regulations in place to allow public-private partnerships, but the focus at the time was on joint projects in infrastructure development. The same formula, sources say, can be used to “better manage” ups and downs in the property market.
Sources also add that the private space requires more funding support from banks, which so far had been quite comfortable lending to government-owned entities.
— with inputs from Bloomberg