On May 31, the Emir of Qatar issued Law No. (12) of 2020 regulating the Partnership between the Government and Private sectors, and published in Issue 10 of the Official Gazette on June 11, 2020. This is the first law that regulates this field, after the partnership between the two sectors in Qatar was subject to the general rules stipulated in several laws. The State of Qatar is considered the third GCC country to issue specific law for this type of transactions after State of Kuwait and Sultanate of Oman. In 2015, the Emirate of Dubai issued a domestic legislation regulating the partnership between the two sectors as well.

The Qatari legislator seeks, by issuing this legislation, to take advantage of the administrative and technical capabilities of the private sector and encourages it to invest in government’s projects, and find various sources of funding without straining the State general budget. This legislation regulated the partnership between the two sectors to implement or develop a project, where one of its parties is a government agency and the other is a single private legal company, or an alliance between a group of private legal companies.

The project that will implemented through the partnership between the government and private sectors will be proposed by the government authority or the management of the partnership between the two sectors in the Ministry of Commerce and Industry, either on its own initiative or on the proposal of the private sector. These projects include, for example, the projects related to education, health, basic infrastructure, energy and water. In the energy field, for example, they have implemented Umm Al Houl Power and Desalination Plant project. In education field, for example, the State of Qatar announced the establishment of 45 schools through a partnership between the two sectors to design, build, finance, maintain and transfer ownership of schools to the Ministry of Education and Higher Education.

Perhaps the most important challenges that may face the partnership between the government and private sectors are the lack of organization, lack of objective, lack of mechanisms of supervision and follow-up, the complexity and prolongation of the procedures, and the change in the political decision that may cancel the project before its implementation.

In order to ensure the appropriate use of the partnership as a method for implementing a specific project, the new Qatari law requires the government agency to prepare a preliminary report on the project idea. If this project is approved by the Prime Minister based on the presentation of the Minister of Commerce and Industry, a committee will be formed for the project. The contractor and this committee then prepare the project study, which shows the strategic and operational advantages of the project, its description, the duration of the partnership contract, the tasks of each party, the detailed plan of the implementation and the estimated capital of the project. This study also specifies the entity that will supervise the implementation of the partnership contract and all other matters.

The Qatari law has referred to the Regulations that may apply on the partnership. These Regulations include (B.O.T), (B.T.O), (B.O.O.T), (O.M), or any other Regulations approved by the Council of Ministers upon the proposal of the Minister of Commerce and Industry.

The law showed the most important aspects that must be included in the partnership contract, including the nature and scope of the works or services that must be implemented and the ownership of project funds and assets, quality assurance means, supervisions and control tools, the financial, technical and administrative follow-up for the operation, exploitation and maintenance of the project. This law also determined the duration of the contract and regulated the rules for the project recovery upon the expiration of the contract. The law also stipulated that the contract shall determine the price of the product or implementation value of the service provided by the project, and the principles and rules for its determination or amendment by increasing or decreasing.

The Qatari law stipulates that the project shall be implemented through the establishment of a company called (project company), and the contracting authority may participate with the successful bidder in the establishment of this company. If the contracting authority does not wish to participate in the establishment of this company, the successful bidder then establishes the company, which its sole purpose if the implementation of the project. The contracting authority may also authorize the successful bidder to implement the project without establishing a company if he has the ability to implement the project in its existing condition and its available financial and technical capabilities. In this point, it is very important not to confuse the partnership contract between the government authority and the successful bidder for implementing and financing the works or providing the services and the project company, which belongs to the successful bidder who implements the project or the company he establishes for the implementation of the project.

The law permits granting financial or tax incentives to the successful bidder or the project company and granting any government support in the form of guarantees or others. It also allows the project company, after the approval of the contracting authority and provision of the sufficient guarantees, to obtain a loan from banks operating inside or outside the State with the guarantee of its contractual rights and assets. The law also permits the Prime Minister, upon the proposal of the Minister, to exempt the project company from all or some of the restrictions imposed under the laws on the companies owned by non-Qataris, including ownership, use, or rental of real estate.

The duration of the partnership contract is to be agreed upon between the parties, provided that it shall not exceed thirty years as a general principle. The Qatari legislator did not specify the minimum duration of the contract in contrast to other legislation, such as the Egyptian legislation, which indicated that the duration of the contract shall not be less than five years. After the expiration of the partnership contract, the ownership of the project, its installations and requirements shall be transferred to the State without any consideration or compensation, unless agreed otherwise in the partnership contract.

On the other hand, the legislator allows the contracting authority to solely terminate the contract, provided that it shall specify the cases of termination in the contract and indicate the financial obligations resulting from the use of this right. The legislator also gives the contracting authority the right to amend the conditions of construction, equipment, maintenance, operation, exploitation and other obligations of the project company. The legislator required that this right to be included within the partnership contract, with a detailed statement of the principles and mechanisms of compensation for this amendment.

The law permits agreement to amend the partnership contract if unforeseen circumstances have occurred after the conclusion of the contract, including amendments to the legislation in force at the conclusion of the contract, which may breach the financial balance of the contract, in a manner that guarantees the financial balance of the project.

Finally, the Qatari legislator attempts through the law regulating partnership between the government and the private sectors in the State of Qatar to allow some flexibility to these types of transactions in which the State is a party instead of using the traditional methods of the public law. Therefore, the legislator explicitly stipulates that the partnership contract is not subject to the Public Tenders and Bids Law, and the financial and banking system of the State. The Qatari legislator also numerated the partnership regulations and the bidding methods of the project to select the best and most appropriate proposal for each project separately. Moreover, the Qatari legislator gives the partnership the right to select the methods, regulations and systems not included in the law after being approved by the Council of Ministers to exclude one of the projects implemented through this partnership from being subject to this law, when necessary.