The phrase Public-Private Partnership goes back to the 1970s, some scholars even argue that the phenomenon of PPP goes much further back into history. However, PPP constructs a huge and an essential commercial activity in today’s world economies, a reality that legislators must establish regulatory provisions for; consequently, the Qatari legislator addressed the matter of PPP in Law number (12) of the year 2020 organising the partnership between public and private sector, an overview of PPPs and the aforementioned law will be introduced in this article.

Why Public-private partnership in Qatar?

  • To enhance the public sector’s ability into adapting new managerial strategies regarding national projects.
  • To develop the private sector in aspects of competition and contribution in strengthening the local economy.
  • To establish strong transparency policies.
  • To increase the credit ratings of projects.
  • To strengthen the co-operation between the public sector and the large, medium and small size enterprises.
  • To limit acts of monopoly and to increase the level of business standards.
  • Operating projects on economic fruitful basis, by experts and specialists.

Public-Private Partnership:

Generally speaking, PPP is a collaboration between a governmental entity and a private sector agency for the cause of financing, building or operating large-scale projects, moreover and referring to Law number (12) of 2020 article number (1) in particular is

an agreement between the Government Entity and the Private Sector for the implementation and financing of the works or the provision of services in accordance with the models set-out in article (3) of this law”

 Whereby the models previously mentioned in the article are:

  • Allocation of lands through a lease or a usufruct, for development by the Private Sector.
  • Build – Operate -Transfer (BOT)
  • Build -Transfer – Operate (BTO)
  • Build – Own – Operate -Transfer (BOOT)
  • Operation and Maintenance.
  • Any other model adopted by the Council of Ministers upon the proposal of the Minister.

In the first instance, it may appear that the Qatari legislator limited the models of possible PPPs in Qatar, whereas the legislator actually designed the provisions of this law in a distinguished flexible manner, as it is stated that any other model of a PPP may be adopted by the council of ministers upon the proposal of the concerned ministry’s minister.

Scope of application:

The legislator explicitly stated that any partnership between public and private sector shall abide to the provisions of this law, in addition to the general partnership policy, which is composed of partnership principles articulated by a “PPP Administration unit” at the Ministry of Commerce and Industry. However, and in accordance with the flexibility previously mentioned, the legislator left the space for exemptions regarding the application of this law by an approval of the council of ministers.

Administrative control:

As one of the main pillars in guaranteeing the success of any commercial activity is integrity, the PPP Qatari Law restricted preparing the project policy, examining tenders, negotiating project agreements and recommending the winning bidder to a separate committee formed for each project, this committee consists of representatives from the contracting authority, the PPP administrative unit and the state audit bureau. However, it is worth mentioning that its possible for a private sector agency to propose a project to the PPP administrative unit.

In Articles (7-16) the Legislator points, in detail, a various number of measures and preparations that governmental entities must abide by, such as preparing a business case for each project and the regulation of tenders. In addition, provisions of article (27) clarify that regarding PPP tenders only the provisions of this law apply without considering the Law on the Regulations of Tenders and Bids and the State’s Fiscal System Law.

Public-Private Partnership Project Contract:

In a preventive step, Article (17) of the PPP Law identified the components that must be included in any PPP contract, protecting both parties from any contract-oriented disputes that may arise, in addition to limiting the duration of the contract to 30 years as a general rule, an exception of extending the duration or renewing the contract is allowed in favour of public interest and may be approved by the Prime Minister. The ownership of the project and its assets reverts to the state of Qatar after the end of the contract’s duration, unless agreed otherwise in the project contract. Last but not least, the PPP contract must be governed by the laws of Qatar exclusively and the courts of Qatar shall have the Jurisdiction upon any dispute unless there is an agreement on an alternative resolution method that require the Prime Minister’s approval.

The Project Company:

Partnerships between the public and private sectors may be in a form of a project company, project’s company sole purpose is the implementation of the project under the partnership contract, however the contribution of the contracting authority in the project company is not compulsory and even the project company may not be established if the contracting authority validated the ability of the successful bidder in implementing a project without requiring to establish a project company. The project company is allowed to obtain loans from national or international banks and to derive a financial return out of projects, furthermore the legislator gave project companies an advantage where these companies may be exempted from restrictions imposed on companies owned by non-Qatari nationals including ownership, usufruct or lease of real estate. Project companies may construct a threat to an economy if not regulated in a proper manner, these regulations were initiated in articles (24, 25), where the legislator introduced a set of boundaries and standards for the project company willing to operate on Qatari lands.

Author: Mr. Mohammad Mufid Ratib Qurashi

More from Alhababi Law Firm