Public-Private Partnerships; Great Economy Boosters and Great Investment Ventures

Public-private partnerships (PPP) have long been a cornerstone of economic and infrastructure evolution in developing countries. PPPs, typically long-term arrangements between the government sector and private sector entities, utilize the local expertise of the government along with the specialized proficiency of private companies to complete large-scale projects that greatly affect the population of a country.

While PPP’s main goal is to develop or enhance a certain aspect of the operation, rarely do their effects stop at the main point. Due to their gargantuan nature, the effect a PPP has on a country and its population continues to ripple throughout the years; as they create jobs, source materials, and services, and eventually lead to more businesses revolving around them.

PPP’s have proven time and again, in both developing economies and bustling economies, that they provide great value for money by establishing better budgetary and timeliness compliance. Even in leading economies such as the UK and Australia, PPP’s have excelled, as a report from HM Treasury in the UK found that PPPs had a 76% on-time delivery track record, comparing favorably to the 30% executed by traditional procurement practices.

Another report from Australia’s New South Wales Treasury indicated that PPP’s were 35.1% better at meeting budgets, while their cost escalation was 4.3% compared to the colossal 18% provided by traditional procurement methods.

These are some reasons we are seeing more countries within the MENA adopt more PPPs into their development.

Take Queen Alia International Airport (QAIA) in Amman, Jordan, for example; a gargantuan project carried out by the government in collaboration with local and international investors.

QAIA aimed to elevate the main Jordanian airport, transforming it into a major travel hub within the Levant. Improvements to size, equipment, capacity, and design were implemented, evolving the airport into a major travel artery; increasing flight capacity from 110 to 180 flights while and ultimately raising passenger capacity from 3.5 million to a whopping 12 million .

PPPs can go above and beyond their main purpose, especially if they are implemented in a key sector of any certain government’s economy; tightening a loose screw in a major sector, triggering a vital lynchpin in the economy can lead to a domino effect that greatly influences the economic landscape of a country. A great example for this lay in Jordan,  the Aqaba Container Terminal (ACT), a 25-year-long PPP signed between APM Terminals and the governmental Aqaba Development Corporation, has been one of the brightest lights in the Jordanian economy.

The partnership transformed the ACT from a feeder port into a mainliner facility, as since the PPPs inception in 2006 until 2019, the number of containers moving through the terminal per year nearly doubled as the ACT provided local businesses a robust platform from which to increase import and export, as the latter increased 6% between 2016-17.

While PPPs are synonymous with huge projects, they do not always concerned with infrastructure, a great example is Dubai’s eSupply Platform which is the official procurement portal for the bolstering economic capital of the UAE.

PPPs create great economic value by realizing their objective, nevertheless, their impact does not stop there. The effect they have on the economy through creating direct and indirect jobs, opening new avenues of business, smoothing the investment landscape for foreign investors, and elevating the status of any given country is nothing short of outstanding.

Amman Vision Investment and Development is perfectly situated to aid in PPP ventures

Through the guidance of the government and the expertise of the private sector, as a study shows private sectors are approximately 30% more adept at handling operations, can enhance any given large-scale project to maximize overall economic development on a long-term basis.

AVID’s portfolio, which consists of major projects such as Amman Slaughterhouse and our Smart Parking Projects, are but highlights of AVID’s constant and growing ventures with the Greater Amman Municipality.

Through leveraging our knowledge, experience, and expertise we can help elevate any PPPs in Jordan and are perfectly situated to guide foreign investors through the Jordanian landscape to ensure the best possible outcomes. If you would like to know more about PPPs in Jordan or how AVID can pave the way for you to invest in the country contact us today.