Federal Decree-Law No. 12 Facilitates Unprecedented Growth in Projects
The UAE Ministry of Finance has announced the issuance of Federal Decree-Law No. 12 of 2023 on public-private partnerships. This legislative framework, which came into effect on December 1, 2023, sets out the general guidelines governing partnerships between federal government entities and private enterprises in the UAE.
The primary objectives of the newly enacted law are to stimulate private sector involvement in developmental and strategic projects, enhance investment in federal government initiatives of social and economic significance, and facilitate the efficient implementation of strategic projects. By leveraging the financial and administrative expertise, technical know-how, and technological solutions available to the private sector, the government aims to deliver world-class services at optimal value.
The law is designed to promote productivity, elevate the quality of public services, and ensure effective management in the development of these services. Additionally, it seeks to expedite the transfer of knowledge and expertise from the private sector to federal entities, offering training and qualification opportunities for UAE-based federal entity employees to manage and operate projects effectively.
Among its key provisions, Federal Decree-Law No. 12 of 2023 emphasises the acceleration of projects providing added value for public funds, the reduction of financial and operational risks on the government, and the transformation of infrastructure projects and public services management. Furthermore, it aims to enhance the competitiveness of projects in local, regional, and global markets.
The law applies to any partnership project proposed by a federal entity, wholly or partially funded by the private sector. However, certain exemptions outlined in Article 4 include existing partnership contracts predating the law's enforcement, as long as they do not conflict with Article 32. Other exemptions encompass outsourced services specified in the Partnership Projects Manual, projects falling below the specified value limit in the Partnership Projects Manual, public asset and service privatisation projects, and supply and procurement contracts related to national security specified in the Partnership Projects Manual. Additionally, federal entities, sectors, and projects exempted by UAE Cabinet Decisions are also excluded.
To ensure flexibility and business continuity, the law explicitly states the continuation of the implementation of Cabinet Resolution No. (1/1) of 2017 and Cabinet Resolution No. (4/8) of 2019 until the issuance of the Partnership Projects Manual, provided they do not conflict with the law. This move aims towards the government's commitment to maintaining a seamless transition in the implementation of partnership procedures between federal entities and the private sector.