Complex Made Simple

Regional companies ‘can make money’ from PPP projects

Kilpatrick Townsend partner Thomas Wilson told the MEED PPP Forum in Abu Dhabi this morning that companies can make money from PPP projects. "We have seen highly successful PPP projects that have allowed construction companies to make nice profits," Wilson said. "Though it has to be said that we have also seen unsuccessful ones."

“Contractors take more risk than usual when they work on PPP projects,” Thomas said. He said that there were four key risks: design deficiency; delays; unanticipated ground conditions and force majeure.

“Other issues are long and expensive tender phases; heightened requirement for performance securities and operator interfaces,” Wilson said.

The future of PPP in the Middle East has recently been called into question following Abu Dhabi’s decision earlier in May to cancel the $3bn Mafraq-Ghweifat road project which was to have been delivered on a PPP basis.

The MEED PPP Forum is being held ahead of the 4th annual Arabian World Construction Summit which opens in Abu Dhabi on 24 May.