DIFC ~ What it Means for PPP? By Matthew Roddan
DIFC stands for Dubai International Financial Centre, a financial free zone established by the UAE. The late Sheikh Zayed wanted to diversify revenue avenues for UAE and move beyond oil and improve the country’s economy. Dubai has the lowest oil reserves across UAE and was picked as the headquarters for the plan. Now, only 6% of Dubai’s income comes from oil and gas. Back in 2012 Dubai’s GDP hit US$140 billion and catalyst that shot up the revenue was establishing economic free zones and offering state of the art infrastructure and a business-friendly atmosphere that attracts foreign investments in large numbers.
According to Matthew Roddan, the development was rapid once commercial banking was commenced in Dubai. In fact the 2015 Dubai Strategic Plan includes Financial Services as the key aspect of Dubai’s future and growth. While this sector is undoubtedly a fast growing sector globally, Dubai has been ranked average when to compared to international standards in this sector. Dubai ranks among the top few financial centers considered stable, globally. While UAE is considered as a volatile region, it has not dented the reputation of Dubai, which is still strong in spite of a real estate collapse in UAE few months back. Do you know PPPs are encouraged in Dubai?
PPPs have been discussed and debated in and around Dubai, with many projects even rolling out generating funds through PPP. With oil prices slumping, PPPs have gained popularity in Dubai, though there are other reasons for failed popularity of PPP in other Middle East regions. It is important to understand that Dubai is a different entity with a different government and legal system, and the government is interested in mobilizing funds through PPP. While there hasn’t been any major PPP development, the newly enacted law encouraging and regulating PPP is expected to be a game changer says Matthew Roddan of Project Ninety Nine. The law defines PPP clearly and lists the features that should be included to ensure quality, income or other advantages.
Up until now, the only hurdle in running PPP in Dubai was related to Procurement Law and the new law has ensured the former law can’t be applied and offering a clear and broad scope for PPP. Unlike other Middle Eastern Countries, Dubai PPP law is liberal and promotes PPP projects. For those looking for suitable and regulated PPP options, this is surely good news and an improvement says Matthew Roddan of Project Ninety Nine.