Australian titan grows public-private partnerships in Gulf

plenarygroup.com

• Plenary chairman says UAE maturing as public-private partnerships hub
• Expanding in region following deal in Abu Dhabi for Zayed City Schools
• Focus comes as Dubai plans further urban development projects

Plenary Group, the Australia-based investor, developer and manager of public infrastructure with assets under management worth more than $45 billion, is expanding its Middle East operations and has projects in the UAE and Bahrain in its sights.

The company has opened its second office in the UAE, in Dubai, just months after launching in Abu Dhabi, and sees significant potential for public-private partnerships (PPPs) in the region.

Chairman John O’Rourke and chief investment officer Paul Crowe recently met with local government officials and industry partners in Dubai. 

The expansion follows Plenary achieving financial close on its first project in the Middle East, the Zayed City Schools PPP. The project is the UAE’s first schools infrastructure PPP and part of the growing pipeline of new PPP projects by Abu Dhabi Investment Office (Adio) and Dubai Department of Finance.

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The Besix-Plenary consortium was selected to finance, design, build and maintain three schools for 20 years, facilitated under the procurement agency Adio and in partnership with the Abu Dhabi Department of Education and Knowledge.

Construction is underway and is due to be completed in 2024. 

“The region is maturing as a hub for PPPs, and we are pleased to be involved, working alongside such willing government partners and some of the global companies with which have established relationships in Australia and North America,” O’Rourke said.

Crowe added: “We are encouraged by the pipeline of likely infrastructure projects across the Middle East.

“We are investing and building a team locally in the UAE and the next 12 months will see us focus on social infrastructure including education and health, and transport infrastructure including rail and road.” 

He revealed that Plenary is currently shortlisted on another PPP project and is actively bidding on others in the area, with an initial focus on Abu Dhabi, Dubai, Northern Emirates and Bahrain. 

Plenary’s focus on the GCC region comes as the Dubai Department of Finance announced new PPP projects worth $6.81 billion in 2021 including 30 infrastructure, transportation and urban development projects. 

The Dubai Health Authority also announced eight healthcare projects, while the Abu Dhabi Investment Office (ADIO) said in February 2020 that it plans to procure infrastructure schemes worth $2.72 billion under the PPP model.

Sarah Al-Shawwaf, senior vice president of Albright Stonebridge Group, told AGBI that the UAE and Saudi Arabia see PPPs as a means to accelerate major projects.

“Saudi Arabia sees PPPs as crucial to meeting its foreign direct investment targets and transitioning some of the financial burden of its giga-projects to the private sector in the long term,” Al-Shawwaf said.

“The UAE, and particularly Abu Dhabi, is also focused on promoting PPPs, but its motivations are somewhat different.

“It sees PPPs more through the lens of industry collaboration, knowledge sharing and building local capabilities,” she said.

Last month, Cyril Lincoln, executive vice president and global head of real estate, finance and advisory at Dubai-based Mashreq Bank, said the GCC’s private sector should carve itself a bigger role in infrastructure delivery and that the region has more than $121 billion of social infrastructure projects planned or under construction.

“Social infrastructure will continue to top the agenda for GCC governments, as they prioritise quality of life, medical care and education for their growing populations,” Lincoln said.

“But there is a need to diversify the way these projects are delivered. It should not be seen as the government’s responsibility alone.”

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According to regional tracker Meed Projects, more than $50 billion of social infrastructure work is under construction, while another $70 billion is in various stages of planning. 

Of the total, nearly $71 billion is located in Saudi Arabia, followed by Kuwait ($33 billion), Qatar ($5.7 billion), UAE ($4.7 billion), Oman ($3.7 billion) and Bahrain ($3.1 billion).

Rashed Abdulla Alteneiji, deputy director of the Economic and Trade Affairs Department in the UAE Ministry of Foreign Affairs and International Cooperation, hailed the decision of Plenary to expand in the country. 

“Plenary’s launch in Dubai reflects the UAE’s flexible and attractive business environment characterised by the ease of doing business, fast duration to set up offices, and the numerous incentives provided to investors to expand in the UAE,” he said. 

Abdulla Abdul Aziz AlShamsi, Adio acting director general, added: “PPP projects have played an important role in developing key infrastructure in Abu Dhabi, while creating significant investment opportunities for businesses.

“The Abu Dhabi government continues to ramp up its partnership with the private sector by facilitating more projects for participation.”

Plenary, which has its headquarters in Melbourne, is a long-term investor, developer and manager of public infrastructure with 79 assets under management across Australia, Canada, the US and the UAE.