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LexisNexis Middle East Law: The impact of Bahrain’s new PPP Guide

In an article for LexisNexis Middle East Law, Paula Boast, Partner and Head of Construction Engineering & Projects Middle East at Charles Russell Speechlys LLP examines the impact of Bahrain’s new PPP Guide.

Following on from the release of its Government Action Plan (2019-2022) Bahrain has now approved a guide regulating public-private partnerships (PPPs). Bahrain Edict No. 30/2022 is designed to work alongside Bahrain’s Sustainable Development Goals 2030 (SDGs) and as part of its overall Economic Vision 2030.

For many years GCC countries have actively considered their traditional procurement systems, weighing them up against alternative options for procurement, particularly for the development of major social infrastructure projects. We have seen policy initiatives in this area wrapped up in each country’s 2030 vision plans or similar documents. They have always highlighted PPP as a viable procurement method. Some countries have gone further. A key feature of the initiatives taken to date by Oman, UAE, Qatar, Kuwait and Saudi Arabia has been the enhancement of inward foreign investment.

A whole host of guidelines, directives, and in some cases PPP laws in the GCC, are now based on a firm platform of creating better business and investment environments for foreign investors. Bahrain has now joined the PPP ranks. Even the countries without formal PPP laws have ensured that distinct PPP principles have been tried and tested on their major projects. GCC countries will most certainly continue in their PPP journey as a means of achieving the developments required to satisfy their individual 2030 visions.

The Bahrain Edict in particular will cement its Economic Development Board’s recognition of the fiscal and non-fiscal benefits of PPPs. For Bahrain projects that will mean focusing on value for money, increased project budget certainty and flexibility to manage the cost of funding. The backdrop to this is, will of course be attracting foreign direct investment.

Successful PPP projects require a well-structured projects pipeline with a PPP friendly political and legal frameworks in place which provides foreign investors with sufficient comfort and protection. Bahrain Edict No. 30/2022 sets out to do exactly that. It is a positive and welcome measure in the Kingdom. In addition, it is a timely one as projects such as Phase 1 of the Bahrain Metro appear to be just on the horizon.

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