–– Save in exceptional circumstances, the maximum tenor of a PPP contract is 30 years –– Subcontracting and sale of PPP assets is not permitted save with the consent of the relevant government agency –– UAE governing law is mandatory –– Disputes cannot be subject to overseas arbitration Some general observations One issue that is not addressed is whether the Dubai government will issue sovereign payment guarantees to sit behind any offtake/payment obligations of a government department or agency. These have been previously been on offer for Dubai power projects. Additionally, the law is silent as to capitalisation requirements for the spv, whether a project spv can be established in a free zone, and whether the 51/49 rule will apply. Supplementary regulations to the new
law will be promulgated but no indication has been given as to when these will be issued. It will be interesting to see which government agencies now push ahead with new PPP initiatives. Clearly, the RTA will be at the forefront, and perhaps we will see some of the government departments responsible for social infrastructure projects moving forward to launch their own projects in the healthcare, education or affordable housing sectors. In any event, the new legislation will be welcomed by the market. It is a clear and well drafted law that will encourage the private sector to seek out future PPP opportunities in Dubai. Adrian Creed Partner, Abu Dhabi T: +971 2 494 3501 E: adrian.creed@clydeco.com A version of this article was first published in Construction Week.
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