Ajman Ruler issues law regulating public-private partnerships

AJMAN, 21st December, 2022 (WAM) — H.H. Sheikh Humaid bin Rashid Al Nuaimi, Supreme Council Member and Ruler of Ajman, has issued Law No. 2 of 2022 on regulating partnerships between the public and private sectors in the emirate of Ajman.

The law aims to encourage the private sector to engage in developmental projects, as well as attract national, regional and international investments in all areas, supporting the emirate’s economic and social development.

The law also aims to enable the emirate’s government to fully implement strategic projects, increase productivity, improve the quality of local public services, reduce financing burdens on its public budget, and support the emirate’s strategic plans aimed at creating a sustainable economy.

On the occasion, H.H. Sheikh Ammar bin Humaid Al Nuaimi, Crown Prince of Ajman, stressed that the emirate of Ajman has become a model to be followed of strengthening the partnership between the public and private sectors, due to the inspiring vision of Sheikh Humaid.

“The new law underscores the aspirations of the Ajman Government to foresee the features of the coming period in terms of financing vital government projects, through the partnership between the public and private sectors,” Sheikh Ammar said.

He also affirmed the law’s importance in strengthening the relations between the public and the private sectors, by increasing productivity, improving the quality of public services, transferring knowledge and expertise from the private to the public sector, and boosting the capacities of employees in project management and operations.

H.H. Sheikh Ahmed bin Humaid Al Nuaimi, Ajman Ruler’s Representative for Administrative and Financial Affairs and Chairman of the Ajman Department of Finance, lauded the new law, which will achieve the department’s goal of promoting integration and creating partnerships between public authorities and the private sector.

The law aims to ease the financial burdens on the government’s public budget in terms of project costs, including their construction, operations or maintenance costs, as well as to change the management models of some infrastructure projects to other forms of government performance-based models related to policy approval and quality control, according to governance requirements.

The law will also support projects in local, regional and international markets by increasing their competitiveness, as well as promote the principles of governance through managing economic activities.

The conditions for completing a partnership contract between the public and private sectors mentioned by the law include the requirement for the project to be economically, financially, technically and socially feasible, and any partnership contract involving financial instalments to be paid by a government authority must stipulate that the authority’s budget must consider these financial allocations.

The law also identifies the authority in charge of approving projects. The director-general of a government agency approves projects if the total cost to the authority under the partnership contract does not exceed AED20 million while the director-general of the Department of Finance approves projects whose total cost exceeds AED20 million until AED50 million. If the partnership contract exceeds AED50 million, it must be approved by the Ajman Ruler’s Representative for Administrative and Financial Affairs.

The law stipulated that the relevant government authority must establish an internal committee under the name of ‘Partnership Committee’, whose members will be appointed by the authority’s director-general. The committee will include a representative of the Department of Finance to be nominated by the authority’s director-general, in case the overall cost to the relevant authority is over AED10 million.

The law includes several rules regulating the selection of partners, company preparation mechanisms, specifications, and acceptance and evaluation of offers, as well as rules for establishing a project’s venture, obligation, content and duration for partnerships.

Sheikh Ahmed is the official in charge of issuing relevant decisions regarding the implementation of the law, which will come into force on 1st January, 2023.