Qatar’s plan to introduce public-private partnerships (PPPs) law

Qatar’s plans to pass a law to introduce the use of public-private partnerships (PPPs) by the end of 2016 is a positive move which will likely attract further foreign investment. With one of the most promising project markets and under the pressure of an immovable deadline to be ready for the 2022 FIFA World Cup, Qatar is currently in the midst of a construction boom and the support of its burgeoning private sector is more essential than ever.

By August 2016, Qatar’s Ministry of Economy and Commerce will submit a draft PPP law to the cabinet with the aim of having the act passed by the end of 2016. PPPs can be described as joint working arrangements between the public and private sector. Specifically, the Qatari Government intends to use PPPs as a form of procurement model for certain sectors including education, health and sport.

PPPs are seen as a feasible alternative to more traditional procurement models. In PPPs private investors take stakes in projects along with the government, bearing part of the risk and sharing profits. Additionally, there is the added benefit of transferring knowledge and experience from the private sector to the public sector – a move the Qatari Government has been pushing to boost economic diversification in accordance with its National Vision 2030 economic strategy.

Qatar has previously limited the use of the PPP structure to the utility and oil and gas sectors. In 2015 Qatar General Electricity and Water Corp signed a contract with a Japanese-led consortium to develop a $3 billion water and power project. The new law is set to make it easier to operate and expand PPPs into other sectors.

With careful planning and structuring of projects, the government sees great potential in partnering with the private sector to increase and improve the supply of related services. While the Qatari Government remains committed to supporting and developing local enterprise, it also recognises the importance of bringing in external manpower and expertise to achieve ongoing, sustainable growth.

The announcement of the new law also comes at a time when much effort is being made to reduce Qatar’s reliance on revenue generated from the oil and gas sector and lower state spending. The introduction of such laws will naturally contribute towards enhancing the country’s status as an attractive business environment that adheres to global market standards.

In this way, the introduction of a PPP law has the potential to contribute significantly to Qatar’s ongoing growth and future prosperity. As the government continues to introduce regulations that enhance the country’s legislative environment, we expect investment flow into the country will gather significant momentum too.

Article by Neil Wilson on May 3rd 2016
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