Legislative framework for public private partnerships in the Sultanate of Oman

Abstract

An effective regulatory framework is essential to attract international investment in infrastructure development and public services through public-private partnerships (PPPs). A transparent and predictable regulatory environment makes PPPs work in the long-term as this enables private sector participants to manage long-term risks in the most effective and efficient way. The Sultanate of Oman has taken bold steps to translate its aspirations stated in Oman Vision 2040 into sustainable projects. The interest of private sector investors in PPP projects requires clear guidance on potential sources of finance and a reliable political, administrative and regulatory framework. The legal framework for PPP in Oman consists of four key pieces of legislation. The Foreign Capital Investment Law (Royal Decree No. 50/2019) outlines the procedures for application of an investment project license and provides for investment incentives and guarantees to international investors. The Law of Privatization (Royal Decree No. 51/2019) provides a transparent framework for awarding of privatization contracts. The Public Private Partnership (PPP) law (Royal Decree No. 52/2019) outlines the procedures for tendering and award of PPP projects and the essential elements of PPP contracts. The Bankruptcy Law in Oman (Royal Decree No. 53/2019) updates the law on corporate distress and introduces concepts of corporate restructuring, preventative composition and bankruptcy filing procedures. These four Royal Decrees are evaluated in this paper. The Royal Decrees promulgated in succession by the Sultanate of Oman bring privatization and PPP policy in line with international best practice and constitute a central component of the nation’s strategy and supply side reforms to diversify the economy.