Public Private Partnerships
Organizing the partnership between the public and private sectors in The Emirate of Ajman
Organizing the partnership between both public and private sectors in the Emirate of Ajman aims at achieving the ambitions of the Emirate of Ajman and its strategic plans aimed at achieving a sustainable economy based on competitiveness, expertise, and diversity, and thus achieving economic and social development, as well as better results and outputs than what the public sector can achieve solely. The partnership between the public and private sectors helps to provide the private sector capital, knowledge and expertise in project management, which contributes to expanding the financial resources available as a result of cooperation with the private sector. Reducing project implementation times, and reducing and improving services costs.
Among the other objectives of organizing the subject of partnership are:
Reducing the burden of financial risks on the government, which may result from the implementation of some projects with high financial risks.
The shift in the management of some infrastructure projects and public services from execution, operation, and direct management to other forms of government performance related to policy approval and quality control of public service delivery according to the governance requirements.
Legal Framework for Partnership Contracts:
Therefore, the Ajman government believes that one of the most important factors for the success of the partnership between the public and private sectors is the existence of a legislative and regulatory framework that provides clarity in the relationship between the public and private sectors.
Ajman Government issued Law No. 2 of 2022, which will come into force on 01/01/2023, regulating partnership contracts between the public and private sectors in The Emirate. The law aims at encouraging the private sector to participate in project development and increase investments in various fields. This contributes to diversifying mechanisms for developing strategic infrastructure projects and improving the quality of services. In accordance with the provisions of this law, a partnership project may be proposed by any government authority, or a private sector entity.
The law also stipulates certain conditions for holding partnership contracts between the public and private sectors, including:
That the project has economic, financial, technical and social feasibility.
If the partnership contract includes financial payments on the government authority, the allocations for those payments must be allocated in the budget of that authority.
The law also stipulates the conditions for project approval, criteria for selecting a partnership project, and the methods, patterns and means of partnership between the public and private sectors, and the basis for selecting a private partner, as well as monitoring or controlling of partnership projects.
The law does not allow the partnership contract to exceed 30 years from the date of signing the partnership contract, unless there is a public interest and getting the approval of His Highness The Governor's Representative for Administrative & Financial Affairs.
The role of Department of Finance in Ajman in relation to partnership projects
According to Law No. 2 of 2022, Ajman Finance Department is responsible for the following:
1- Suggesting draft legislation regulating partnership, pursuant to the best practices applied in this regard, as well as updating it, in light of the results of government authorities' experiences in executing partnership projects and the proposals of these entities.
2- Preparing the draft executive regulations for the partnership law which includes the provisions and procedures to be taken into account if the government authorities are willing to hold partnership contracts.
3- Studying the feasibility studies for the company’s projects and submitting a recommendation thereon to the governor’s representative.
4- Participating in providing the appropriate environment for investment in partnership projects, in coordination with the competent authorities in the Emirate.
The Department of Finance ('DOF') is continuously aspiring to enhance financial sustainability of the public sector and provide stimulus for economic growth in the Emirate of Ajman. Developing and maintaining a sustainable reliable and high quality infrastructure is the key to success of any city. In line with these aspirations the PPP Unit has been established at DOF which is responsible for:
Driving the policy to formulate the objectives and the relevant PPP policies for governmental entities.
Developing and distributing guidelines and toolkits to the Contracting Authorities to enable standardized processes.
Providing final approval of the business case for projects as defined in the PPP Law No. 22 2015.
Supporting the relevant Contracting Authorities during the phases of project identification preparation procurement contract negotiations & awarding, execution (including financial close) and monitoring & evaluation.
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