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Overview UAE’s new Decree to Regulate Public and Private Partnership

Published on : 15 Apr 2024

UAE’s new Decree to Regulate Public and Private Partnership

The Ministry of Finance in the UAE recently announced a pivotal development with the issuance of Federal Decree-Law No. 12 of 2023, focusing on public-private partnerships (PPPs). This legislation, effective from December 1, 2023, lays down the groundwork for collaborations between federal government entities and the private sector, aiming to propel economic growth and enhance public services across the nation.

Promoting Private Sector Participation

The primary aim of Federal Decree-Law No. 12 of 2023 is to stimulate private sector involvement in developmental and strategic projects in the UAE. By providing a regulatory framework for PPPs, the law seeks to encourage increased investment in federal government projects of social and economic value. This move aligns with the broader goal of leveraging private sector expertise, technical know-how, and technological solutions to expedite project implementation and improve competitiveness in local, regional, and global markets.

Driving Efficiency and Innovation

The legislation also aims to facilitate the transfer of knowledge and expertise from the private sector to federal entities, empowering employees to manage and operate projects effectively. Moreover, by accelerating the implementation of projects that offer added value for public funds, the law aims to minimize financial and operational risks on the government while enhancing the management of infrastructure projects and public services. This strategic focus on efficiency and innovation is expected to lead to improved productivity and the delivery of world-class services to the community.

Scope and Applicability

Federal Decree-Law No. 12 of 2023 applies to partnership projects proposed by federal entities and funded either wholly or partially by the private sector. While the law sets out a broad framework for PPPs, exemptions are specified to accommodate pre-existing partnerships, projects falling below specified value limits, and exclusions related to national security. These exemptions provide clarity and flexibility within the regulatory framework, ensuring that partnerships are aligned with the law's objectives.

Alignment with Operation 300bn

The introduction of this legislation is closely aligned with Operation 300bn, a comprehensive initiative aimed at increasing the industrial sector's contribution to the UAE's GDP. By providing a regulatory framework for private sector involvement, Federal Decree-Law No. 12 of 2023 serves as a crucial supporting mechanism for Operation 300bn, facilitating the achievement of ambitious economic targets.

Guidance for Federal Entities

To ensure the success of PPP projects, the legislation provides clear guidance for federal entities, outlining processes and legal requirements for the initiation and execution of partnerships. Emphasis is placed on transparency and accountability throughout the PPP process, ensuring that partnerships benefit all stakeholders involved. Additionally, the law encourages private sector participation in less common sectors, reflecting a commitment to holistic development and the improvement of social services and infrastructure.

Future Prospects

Looking ahead, the implementation of Federal Decree-Law No. 12 of 2023 is expected to drive increased diversification into new sectors, streamline regulatory processes, and attract international interest in PPPs in the UAE. As the regulatory framework evolves in response to stakeholder feedback and emerging global standards, the nation is poised to realize its economic objectives and foster innovation in public-private collaboration.

In summary, the implementation of Federal Decree-Law No. 12 of 2023 represents a significant advancement in the UAE's efforts to strengthen public-private partnerships. By providing a comprehensive regulatory framework, the law sets the stage for increased private sector participation, driving economic growth, fostering innovation, and delivering lasting benefits to the nation's development agenda.


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