New Public Private Partnership (PPP) Research Study

Doha, February 06 (QNA)- A new research study entitled, "Public Private Partnerships: A Vehicle of Excellence for the Next Wave of Infrastructure Development in the GCC" has been released by Markab Advisory here on Monday. The study, sponsored by the Qatar Financial Centre Authority ("QFC Authority") and the Ministry of Business and Trade ("MoBT"), State of Qatar, concludes that Public Private Partnerships ("PPP") are poised to play a key role in underpinning the success of the next wave of infrastructure development expected in the GCC. The GCC plans to invest some US$1.5 -2 trillion in infrastructure projects alone over the next ten years, with additional spending on the development of new economic clusters in sectors such as tourism, science and technology, healthcare and education. In Qatar, for example, there are plans to spend some US$200 billion on infrastructure development to realise the National Vision 2030 development plan, with the FIFA World Cup 2022 expected to act as a catalyst to accelerate much of this. Given that massive investments will be made in building assets of a long-term nature for public use and benefit, efficient planning and execution will be critical. While capital is abundant in the region, the study found that experience of PPP initiatives around the world, notably in the UK, Canada and Australia, suggests that expertise, knowhow, risk sharing and a long-term commitment to success are equally important. In the GCC the PPP model can play a key role in addressing these challenges and bringing these factors together in an efficient and transparent model. The study found that the potential advantages of PPP to the GCC economies include: Potential economic benefits and cost savings of billions of dollars through investment efficiencies such as avoiding time and cost overruns. These economic benefits can reach up to $30 billion, equivalent to 25% of Qatar s Annual GDP. ; Rapid acceleration of the pace of infrastructure development; Securing knowledge transfer to the local economy; and Promoting greater transparency and accountability; Encouraging excellence in infrastructure development. In terms of Qatar specifically the study found: Qatar already has a successful track record in PPP in the power sector. Over 2/3rd of Qatar s power generation capacity is installed through PPP arrangement. Now Qatar has an opportunity to transfer this success in other infrastructure sectors; Opportunities across a range of sectors including power, water, railways, roads, education, healthcare and sports infrastructure for the FIFA World Cup 2022; Qatar has the potential to become a hub for infrastructure and project finance activities. The MENA region has completed over 100 projects on a PPP basis over the last 10 years. However, most of these have been predominantly in the power sector. The study found that the MENA region stands at a critical stage in its development and that PPP is poised to play a strategic role in that development. However, the focus in the use of PPP in the region will need to shift from projects to programmes across a variety of sectors including power, airports, railways and roads, healthcare and education as well as social housing. Yousuf Al Jaida, Director of Banking and Asset Management - QFC Authority said, "As this new study shows, it is clear that there are many opportunities for the development of PPP in the region as economic growth and infrastructure development continue apace. Qatar offers some particularly exciting opportunities across a variety of sectors as we continue to diversify the economy away from hydrocarbons and as we gear up to host the FIFA World Cup in 2022. We at the QFC Authority are keen to support the opportunities which PPP brings for financial services firms in the region. Our mandate is to help develop a competitive, modern financial sector in Qatar fitting to the country s needs in the twenty-first century. I am confident that PPP can be at the heart of realising this ambition." "Qatar already has the building blocks for a PPP programme in place. There is a reservoir of infrastructure projects planned for the next decade. Resident PPP experience of the power sector, strong growth momentum and leadership support for PPP can be leveraged to promote PPP in other infrastructure and social sector projects'', said Mohammad Athar. '' Qatar can draw lessons from successful examples from around the world to develop its own home-grown PPP program" Mohammad Athar, Managing Director of Markab Advisory said in his statement. "As a catalyst to promote PPP in infrastructure specifically in social sectors, public sector can consider delivering funding to projects through a dedicated incubation fund to nurture the innovation culture as well as align interests of all the stakeholders. Example of PPP Canada where the federal government established a dedicated fund to promote PPP in various infrastructure sectors throughout the country can be a good case study for Qatar." Aamir Rehan, Managing Partner, Markab Advisory added. It is worth to mention that the Qatar Financial Centre (QFC) is a financial and business centre established by the Government of Qatar and located in Doha. It has been designed to attract international financial services institutions and major multi-national corporations in particular those operating in the reinsurance, captive insurance and asset management sectors and to encourage participation in the growing market for financial services in Qatar and elsewhere in the region. The QFC operates to international standards and provides a first class legal and business infrastructure for those operating within the QFC. The QFC was created by Qatar Law No. (7) and has been open for business since 1 May 2005. The QFC Authority is the commercial, administrative and legislative body responsible for leading the expansion of Qatar s financial services sector, providing a uniquely sustainable platform for regional growth in reinsurance, captive insurance and asset management. (QNA)