In this month’s edition of Construction Week magazine, our Advisory Director, Andrew Thomas joins a number of industry experts as they weigh in on Dubai’s new 1.4 billion AED budget allocation for the construction sector.
Andrew shares insights about private-public partnerships (PPPs) with regards to risk allocation and the role consultants can play to ensure project success.
Here’s an excerpt from the feature:
‘As part of the general budget, Dubai has also activated the Public-Private Partnership Law and is looking to develop new project financing mechanisms such as ling term financing which extends for more than 25 years.
One of the may upsides and positives in the structure and lifecycle of co-financed PPP schemes is the level of due diligence, scrutiny, stakeholder engagement, and bankability that is exercised at each stage.
Elaborating on such schemes, Andrew Thomas, Advisory Director at WSP Middle East, says: “The equitable risk allocation between Public and Private players means that all parties have balanced responsibilities to make the project successful. In WSP’s experience, interested consortia that have not structured their teams effectively or fully understood the extra responsibilities and liabilities which PPP bring tend to drop out of the tendering process at an earlier stage of a transaction.” He adds: “The very nature of a performance-based PPP encourages quality at every step.”
Under a PPP, in addition to the public and private sector entities, consultants also have a crucial role to play. Thomas says that consultants support public and private sector clients from the outset with balanced technical, commercial, legal, and insurance guidance at each stage.
“By advising on robust mechanisms for risk transfer, management of the risk profile, and shared risk allocation, consultants are an invaluable driver of quality and can instill a stronger semblance of trust by managing the relationship amongst public–private partnership partners through to closure,” Thomas adds.’
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