MENA records 116% jump in value of PPP projects over past 12 months

$185bn worth of schemes cur­rently planned or un­der­way in the re­gion

Muscat Daily - - BUSINESS - Our Cor­re­spon­dent

The Mid­dle East and North Africa (MENA) re­gion wit­nessed a 116 per cent jump in the value of projects planned or un­der­way us­ing pub­lic pri­vate part­ner­ships (PPP) over the past 12 months, ac­cord­ing to a new re­search from MEED.

MEED, in its lat­est report ‘PPP in the Mid­dle East & North Africa 2017’ said that about 151 PPP projects are cur­rently planned or un­der­way across the re­gion out­side the en­ergy sec­tor with a com­bined value of about US$185bn.

Ac­cord­ing to MEED’s report, there are 11 PPP projects in Oman which are in plan­ning and ex­e­cu­tion stage with a to­tal value of around US$2bn.

The report looks at the re­gion’s plans to use PPP to de­liver gov­ern­ment in­fra­struc­ture and ser­vices such as rail­ways, air­ports, hous­ing and health­care that tra­di­tion­ally have been de­liv­ered di­rectly by gov­ern­ment agen­cies.

The fall in oil prices since 2014 is re­strict­ing the ca­pac­ity of gov­ern­ments to fund new in­fra­struc­ture projects and fi­nance min­istries are in­creas­ingly seek­ing to en­gage the pri­vate sec­tor in de­sign­ing, build­ing, fi­nanc­ing and op­er­at­ing pub­lic sec­tor in­fra­struc­ture and ser­vices, the report said. But it warns that sig­nif­i­cant leg­isla­tive, ca­pac­ity and po­lit­i­cal bar­ri­ers re­main to be over­come if the re­gion is to de­liver its PPP plans.

“The rise of PPP over the past few years is one of the most strate­gi­cally sig­nif­i­cant shifts in the busi­ness land­scape of the Mid­dle East since the na- tion­al­i­sa­tion of the oil in­dus­try in the early 1970s,” MEED’s ed­i­to­rial di­rec­tor Richard Thomp­son said.

“But it is not easy,” he said. “The tran­si­tion from full gov­ern- ment con­trol to pri­vate-sec­tor con­trol re­quires a host of dif­fi­cult changes to be im­ple­mented cov­er­ing ev­ery­thing from the way en­tire in­dus­tries are reg­u­lated, to how much things cost over, to who has de­ci­sion mak­ing au­thor­ity. It re­quires new skills and tech­ni­cal ca­pac­ity.”

Ac­cord­ing to the report, the PPP pipe­line will grow fur­ther in the next two to three years as gov­ern­ments seek to in­crease pri­vate sec­tor par­tic­i­pa­tion to com­plete mega-projects, es­pe­cially in the trans­porta­tion sec­tor.

It said most of the PPP projects planned are in the GCC na­tions. With about US$42.9bn worth of PPP projects planned, Saudi Ara­bia has by far the big­gest pipe­line of PPP projects and has re­cently cre­ated a ded­i­cated unit, the Na­tional Cen­tre for Pri­vati­sa­tion (NCP) to de­liver the pro­gramme. Kuwait and the UAE are also mov­ing for­ward with their PPP project pipe­line, while Oman and Qatar are plan­ning to launch PPP leg­is­la­tion in the se­cond half of 2017.

(Mus­cat Daily)

MEED’s report says, there are 11 PPP projects worth around US$2bn in Oman which are in plan­ning and ex­e­cu­tion stage

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