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The Ministry of Finance says the new PPP law will improve quality of services provided by federal entities. Image Credit: Afra Mubarak Alnofeli/Gulf News

Dubai: The UAE has set the regulatory framework for all future public-private partnerships (PPP) in the country, involving federal government entities. In this regard, the Ministry of Finance issued Federal Decree Law No. 12 of 2023.

The law will also 'encourage' private sector entities to participate in developmental and strategic projects; increase investment in federal government projects of social and economic value, and help the government to 'efficiently' implement strategic projects.

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In doing so, the parties involved stand to benefit from financial and administrative expertise, technical knowledge, and technology solutions available to the private sector.

"The new law will boost productivity and improve the quality of public services, while ensuring effective management for the development of those services," the statement from the Ministry added.

What the PPP UAE law says
The Federal Decree Law No. 12 of 2023 - which became effective December 1, 2023 - applies to any partnership project that is proposed by a federal entity and wholly or partially funded by the private sector.

The law also specifies exemptions in Article (4), which include partnership contracts that were entered into before the law’s enforcement date - as long as they do not conflict with Article (32) of the law, outsourced services specified in the Partnership Projects Manual, projects whose value is less than the limit specified in the Partnership Projects Manual, public asset and service privatisation projects.

It also applies to supply and procurement contracts related to national security specified in the Partnership Projects Manual, and federal entities, sectors, and projects that are exempt pursuant to UAE Cabinet Decisions.

Knowledge transfer

Also getting smoothed out is the expertise transfer from the private sector to federal entities, side by side with training public sector employees to manage and operate projects.

"The new law will accelerate the implementation of projects that offer an added value for public funds, minimise financial and operational risks on the government, transform the management of some infrastructure projects and public services, and enhance the competitiveness of projects in local, regional, and global markets," the Ministry said.

Business continuity

To ensure 'flexibility and business continuity', the new Law 'explicitly' mentions the continuation of implementation of Cabinet Resolution No. (1/1) of 2017 on the procedures manual for partnership between federal entities and private sector. And Cabinet Resolution No. (4/8) of 2019 on the procedures manual for partnership between public and private sectors in the UAE, until the issuance of the 'Partnership Projects Manual'. So long as they do not conflict with the law.