Abu Dhabi: The Ministry of Finance (MoF) has issued Federal Decree-Law No. 12 of 2023 on public-private partnerships, which sets the general framework for partnerships between federal government entities and the private sector.
In addition to regulating public-private partnerships in the UAE, the law aims to encourage the private sector to participate in developmental and strategic projects, increase investment in federal government projects of social and economic value, and enable the government to efficiently implement strategic projects, as well as benefit from financial and administrative expertise, technical knowledge, and technology solutions available to the private sector.
The new law, which entered into force on December 1, 2023, will enable the community to attain world-class services at the best value, boost productivity, and improve the quality of public services while ensuring effective management for the development of those services.
It also aims to catalyze knowledge and expertise transfer from the private sector to federal entities and train and qualify employees of federal entities in the UAE to manage and operate projects.
Moreover, the new law will accelerate the implementation of projects that offer added value for public funds, minimize financial and operational risks for 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 Federal Decree-Law 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 privatization projects, as well as supply and procurement contracts related to national security specified in the Partnership Projects Manual, and federal entities, sectors, and projects that are exempt under UAE Cabinet Decisions.
To ensure flexibility and business continuity, the Federal Decree-Law No. 12 of 2023 explicitly mentions the continuation of implementation of Cabinet Resolution No. (1/1) of 2017 on the procedures manual for partnership between federal entities and the private sector and Cabinet Resolution No. (4/8) of 2019 on the procedures manual for partnerships between the public and private sectors in the UAE, as long as they do not conflict with the law.