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Middle East: Jordanian PPP law update

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Amendments to the recently passed draft PPP law have been approved by Jordan's Lower House Investment Committee (the “Committee”).

The Committee has amended articles in the draft PPP law by removing the obligation on the Government to obtain parliamentary approval on all contracts agreed with the private sector. The Committee felt that such an obligation would slow down investment into Jordan.

The draft PPP law

The draft PPP law was voted in favour by the Jordanian parliament on 8th July 2014 and included the creation of a new 9-seat PPP council (the “Council”) to evaluate all contracts entered into with the private sector for approval. Members of the Council include:

  • the Jordanian Prime Minister;
  • the governor of the Central Bank of Jordan;
  • the director of the public-private partnership unit; and
  • the ministers of finance, trade, and planning.

However, since being introduced, the draft law has been criticised as there is no representative from the private sector on the board of the Council.

Amendments to the draft PPP law

Further amendments to the draft PPP law include the following:

  • maximising the extension of PPP contracts to a total of 35 years – an increase from the 15 year extension initially mandated; and
  • a rejection of the provision that the Government will have a right to the profits if it exceeds the agreed amount in the contract.

Next steps

The updated draft PPP law will now go to the Lower House of Parliament, before it is ratified by royal decree.