Critical Success & Failure Factors for Public Private Partnership Projects in the UAE
The British University in Dubai (BUiD)
This report is part of the requirements of the Master program of Projects Management in the British University in Dubai. The purpose of this report is to identify and examine the critical success and failure factors for Public Private Partnership projects (PPP) in the UAE. The report provides a brief description of PPP and the area in which it is adopted internationally as well as the types of PPP. The success and the failure factors available in PPP projects will be described and identified. Eleven success factors and eight failure factors were identified from the literature. The method used in the research was to carry out case studies on available PPP projects in the UAE. There were few PPP projects identified in the UAE, but the number is increasing. Most of them are under development phase and only two were completed and under operation. There is no national data available on PPP projects that can be used for this research, therefore face-to-face interviews with senior staff in each PPP project were carried out and notes were taken and summarised in the appendix section. Several telephonic enquiries were carried out as well as search in the web for data regarding the case studies. The major findings indicate that two types of PPP were adopted in the UAE, and they are Build, Operate and Transfer (BOT), and PPP based on management service contracts. The findings show that tender process were carried out for management service contracts, while BOT projects procurement process were carried out through initiatives of either the public partner or the private partner followed by further discussions and negotiations. Each case study had its own circumstances and conditions that it developed in, therefore it perceived success and failure factors in a different way from other case studies, and each success factor and failure factor had different level of importance in each PPP project. In general, political support was the most important success factor for PPP projects followed by a strong private consortium, while the most important failure factor was the lack of appropriate skills. These findings show that the Government support is 6 critical for PPP projects to success. It is a new concept in the country, and it needs solid base in order to develop on. Strong private consortium is essential to the success of the PPP project as it is the consortium that will take care of the technical aspects of the PPP project and it will carry out the project. If the consortium lacks essential skills and experience, the project will fail. Another major finding appeared in this report is the attitude of the banks and the financial institutions towards PPP projects. They hesitated to finance some of the PPP projects in the UAE and preferred to watch how things are going on with PPP. Banks are always conservative regarding new things and in the same time suspicious about the success of new ideas, and as no sufficient security could be provided to the banks, the private partner did not own the land and the assets, the bank refused to finance the project. The report provided several recommendations for better improvement of PPP projects in the UAE. The main recommendation was to create a regulator authority for PPP projects in the UAE, which will monitor the performance of the private partner in the project in order to make sure that the objectives for the PPP are achieved, to regulate the relationship between the public and the private partner, to be the final authority that gives final decision regarding any dispute that may raise in PPP projects in the UAE. The Government should issue PPP Law in order to provide sufficient legal status for the project and for the private partner, and to provide legal security for the financial institutions and banks that are interested to finance the project.
critical success, failure factors, United Arab Emirates (UAE), Public Private Partnership Projects (PPP)