INSERT INTO `tm_wsal_metadata` (`id`, `occurrence_id`, `name`, `value`) VALUES
(309458, 29506, 'ReportText', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignleft\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"464\" height=\"386\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignleft\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"371\" height=\"309\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
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(309508, 29510, 'MetaValueNew', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"371\" height=\"309\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
(309509, 29510, 'MetaValueOld', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignleft\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"371\" height=\"309\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
(309510, 29510, 'MetaLink', 'content'),
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INSERT INTO `tm_wsal_metadata` (`id`, `occurrence_id`, `name`, `value`) VALUES
(309512, 29510, 'ReportText', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignleft\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"371\" height=\"309\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"371\" height=\"309\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
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(309562, 29514, 'MetaValueNew', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"308\" height=\"256\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
(309563, 29514, 'MetaValueOld', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"371\" height=\"309\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
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(309565, 29514, 'EditorLinkPost', 'https://www.tamimi.com/wp-admin/post.php?post=8196&amp;action=edit');
INSERT INTO `tm_wsal_metadata` (`id`, `occurrence_id`, `name`, `value`) VALUES
(309566, 29514, 'ReportText', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"371\" height=\"309\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"308\" height=\"256\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
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(309640, 29521, 'MetaValueNew', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"308\" height=\"256\" /></h3>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
(309641, 29521, 'MetaValueOld', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"308\" height=\"256\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
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INSERT INTO `tm_wsal_metadata` (`id`, `occurrence_id`, `name`, `value`) VALUES
(309644, 29521, 'ReportText', '<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"308\" height=\"256\" /></h3>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\"></h2>\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8245 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_17_Image_0003.jpg\" alt=\"\" width=\"570\" height=\"289\" />The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments. By way of example, the UAE has one of the most buoyant private school markets in the world, with consistently high levels of occupancy coupled with year-on-year growth in demand, in large part as a result of the UAE’s growing expatriate population. It has been estimated that Dubai will need 134 new schools to be constructed over the course of the next 10 years in order to accommodate the estimated 200,000 pupils that will need seats by the 2027/2028 school year. It is a similar story in other parts of the Middle East. This will therefore require a concerted effort by developers, contractors, funders and the relevant regulatory bodies in order to facilitate the construction of such developments, in a manner that meets the every-increasing demand within the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The costs associated with investing in school infrastructure are significant. There are various reasons for this, one of which is the potential complexity of issues faced when embarking on such projects, such as the need to integrate the programme of works around the day-to-day activities of the school system (applicable for example where refurbishment works are being undertaken on an existing school).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The procurement route adopted on any construction and engineering project is one of the key considerations for developers, which will allow them to assess whether the relevant works and moreover the project as a whole can complete on time, be of the required quality and be within budget. Another important consideration is ensuring that the tender process allows for a close examination of contractors’ experience within the sector. Given the specialist nature of school construction projects, developers should not only examine pricing but also consider whether the bidding contractor has sufficient knowledge and experience of working on such specialist projects in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A number of procurement options are available to developers operating within the education sector when procuring works and services from third parties. Each of these has its own advantages and disadvantages. In this article we discuss the following key procurement routes and explain the main advantages and disadvantages associated with each:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Traditional contracting;</li>\r\n 	<li dir=\"LTR\">Design and build contracting; and</li>\r\n 	<li dir=\"LTR\">Public-private partnerships.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Finally, we will briefly examine the important role that a well drafted operation and maintenance agreement has in addressing the ongoing operational demands of a school, following completion of a project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that in addition to procuring works directly, an alternative option for developers is to enter into a ‘build to suit’ arrangement with educational facility operators. This essentially involves land owners, ground lease owners or developers undertaking the construction of an educational facility provided that they have a long term tenant (whether a school, educational institution or an operator) who wishes to enter into a long term lease of the facility. Although beyond the scope of this article, build to suit education projects are an important consideration and examined in greater detail in the article entitled \"<a href=\"https://www.tamimi.com/law-update-articles/build-to-suit-education-projects/\">Build to Suit Education Projects</a>\" authored by Partner and Head of Real Estate, Jeremy Scott, in this month’s edition of Law Update.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8272 size-large\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_549215536-690x1024.jpg\" alt=\"\" width=\"640\" height=\"950\" />Traditional Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">This is probably one of the most often encountered forms of procurement adopted by developers in the education sector. Essentially the developer (also known as the \"employer\") will engage a professional team of consultants (usually an architect, mechanical and electrical engineer, civil and structural engineer and perhaps other specialist consultants) to prepare designs and specifications for the works that are to then be constructed by a building contractor. Such designers typically have a proven track record and experience in operating in the education sector and this provides comfort that the designs will be well suited for an education facility and will be readily accepted by the relevant authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The contractor will be engaged separately by the developer under a construction contract and will be responsible for engaging sub-contractors to the extent required in order to allow them to complete the required works in accordance with the approved designs.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The building contract will only be responsible for the construction of the works (as design responsibility remains vested in the design team). Given that school projects may concern the expansion of existing facilities (as opposed to ‘green field’ projects), it is likely that the construction works will need to be carried out in accordance with a detailed programme to ensure that interference and disruption during school time is minimised. Additionally, the construction contract needs to contain a specific procedure for the rectification of defects, again to ensure that construction works do not encroach on the day-to-day running of the school.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Some of the advantages of traditional contracting include that the employer retains control over the design of the project and therefore can monitor quality and ensure their requirements in this regard are met. This is a potentially telling advantage on account of the planning and design nuances that are applicable to school designs. There is, however, a greater risk of the building contractor being delayed and of them incurring cost overruns due to the additional oversight and involvement that the employer will have in the project. Delays can be particularly harmful as they may result in the school not being completed in time for an academic year and this could result in significant losses being incurred. In addition, there will be multiple points of responsibility, which can make the employer pursuing a claim in respect of defects that arise, more complex, costly and time consuming.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Design and Build Contracting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The design and build procurement route generally involves the design of the works being undertaken entirely by the building contractor/its professional team of design consultants. Alternatively the initial design will be developed by the employer/its professional team of design consultants, subsequent to which responsibility for these designs will transfer to the contractor by way of novation of the design consultant appointments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Here the building contractor takes single point responsibility and thus is liable to the employer for both the design and construction of the works.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The advantages associated with design and build contracting include that it offers greater certainty in terms of time for completion and cost, as such projects are usually for a defined duration and priced on a fixed, lump sum basis (this is of course provided that the employer does not make any changes to the required scope of works). As noted above, delays can be very damaging in the context of a school project so developers (and their funders) typically address this issue in detail in the construction contract. For example, the building contractor may be entitled to an early completion bonus while the employer will often insist on the ability to instruct the building contractor to accelerate the works if they fall behind schedule. Although delay damages are a ‘last resort’, thought should be given to the quantum of delay damages so that they correspond (as far as possible) to the loss that the employer will suffer arising out of a delay (i.e. if the facility is not ready for the start of the school term).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The presence of single point responsibility makes it more straightforward for the employer and other parties with recourse to the building contractor, to seek redress should any design defects or workmanship issues arise, as opposed to having to pursue the relevant design consultants individually.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this procurement route include that there may be added scope for delays to the project due to the changes that might be requested by the employer during the construction of the project or otherwise as a consequence of a delay in novating the design consultants to the building contractor. Such changes can also impact on costs. The employer also loses a degree of control over the project and therefore is less able to maintain oversight over quality, when compared to the traditional procurement route. This can have a significant impact in the context of an educational establishment on account of the typically prescriptive Employer’s Requirements. It is therefore important that the design and build contractor is closely supervised.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Public- Private Partnerships</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Public Private Partnerships (or \"PPPs\") structures have been used to procure schools, including in the United Kingdom and Australia but are less common in the region. In the traditional sense, the public authority would engage a private entity (usually in the form of a Special Purpose Vehicle) to design, construct, operate and maintain a school for a term of usually between 15 to 25 years, in exchange for which usage payments will be made to the private entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of the recent PPP Law in Dubai in addition to the proposed enactment of the draft Private Sector Participation Law (which will follow the previously introduced Privatization Projects Manual) in Saudi Arabia, underlines the growing emphasis being placed on PPPs by governments in the region and it may help facilitate the gradual adoption of this approach within the region. For the time being however, ‘quasi’ PPP structures are more likely to be adopted, whereby a private entity may grant a long term concession to a specialist school to design, construct, operate and maintain an educational facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An important advantage of PPPs is that it allows the procuring entity to leverage efficiencies and expertise in the private sector in order to enable it to attain its development objectives. For the private sector, PPPs can assist in helping to secure the third party funding necessary to enable the project to proceed, due primarily to the involvement of a public authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disadvantages of this method of procurement include that the procurement and tendering process can be lengthy and expensive, when compared to the traditional procurement process.</p>\r\n\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8246 alignright\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_18_Image_0001.jpg\" alt=\"\" width=\"308\" height=\"256\" /></h3>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The education sector in the Middle East has often been widely perceived as a lucrative investment opportunity for developers looking to expand their portfolio of investments…\"</h2>\r\n&nbsp;\r\n\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operation and Maintenance Agreement</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Once a school has been constructed, in order for it to remain in good working order and attractive to the market, it must be properly operated and maintained. This is usually undertaken by the developer appointing an operation and maintenance contractor (\"O&amp;M Contractor\") under an operation and maintenance agreement (\"O&amp;M Agreement\", otherwise also known as a \"facilities management contract\"). Some of the more important provisions of an O&amp;M agreement, that the parties should ensure are adequately addressed, include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Having a clear and detailed scope of works specifying exactly what is required of the O&amp;M Contractor in addition to the key performance indicators (or \"KPIs\" against which their performance will be measured). These KPIs should be SMART (Specific, Measurable, Achievable, Relevant and Time Based);</li>\r\n 	<li dir=\"LTR\">A warranty that the O&amp;M Contractor has carried out all reasonable investigations and inspections of the school facility and that the asset is capable of being managed to the standards prescribed by the O&amp;M Agreement. This will reduce the risk of the O&amp;M Contractor seeking to blame the building contractor for any deficiencies in the services they perform;</li>\r\n 	<li dir=\"LTR\">From a practical perspective, where the school is being newly constructed, it may be a good idea to have the O&amp;M Contractor inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. The contractor may also be required to provide the O&amp;M Contractor with training for the operation and maintenance of the school. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address issues of this nature;</li>\r\n 	<li dir=\"LTR\">Penalties where the O&amp;M Contractor does not achieve the KPIs or for example, where there is an interruption to the operations of the school during school and non-school hours; and</li>\r\n 	<li dir=\"LTR\">Termination rights which may be linked to a breach of the KPI regime.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">There is of course a suite of other important considerations that the parties should be mindful of when negotiating an O&amp;M Agreement, such as insurance, force majeure, performance security and payment. In any event the contract should be closely examined to ensure it is tailored to the specific commercial arrangement between the parties, in addition to the laws of the jurisdiction or Emirate which will govern the contractual relationship.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/construction-infrastructure/\">Construction and Infrastructure</a> team regularly advises on all elements of the construction procurement process. For further information please contact <a href=\"https://www.tamimi.com/lawyer/euan-lloyd/\">Euan Lloyd</a> (<a href=\"mailto:E.Lloyd@tamimi.com\">E.Lloyd@tamimi.com</a>).</em>'),
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(309790, 29538, 'MetaValueNew', '<p dir=\"LTR\" align=\"LEFT\">Qatar is taking extensive positive steps to improve its legislative system. This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p>\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>&nbsp;\r\n&nbsp;<img class=\"aligncenter size-full wp-image-8273\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_274361663.jpg\" alt=\"\" width=\"1000\" height=\"364\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>');
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This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p> &nbsp;\r\n\r\n&nbsp;<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" /> &nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>'),
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(309794, 29538, 'ReportText', '<p dir=\"LTR\" align=\"LEFT\">Qatar is taking extensive positive steps to improve its legislative system. This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p> &nbsp;\r\n\r\n&nbsp;<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" /> &nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>|<p dir=\"LTR\" align=\"LEFT\">Qatar is taking extensive positive steps to improve its legislative system. This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p>\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>&nbsp;\r\n&nbsp;<img class=\"aligncenter size-full wp-image-8273\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_274361663.jpg\" alt=\"\" width=\"1000\" height=\"364\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>'),
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(309844, 29542, 'MetaValueNew', '<p dir=\"LTR\" align=\"LEFT\">Qatar is taking extensive positive steps to improve its legislative system. This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p>\r\n&nbsp;\r\n\r\n&nbsp;<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>&nbsp;\r\n&nbsp;<img class=\"aligncenter size-full wp-image-8273\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_274361663.jpg\" alt=\"\" width=\"1000\" height=\"364\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>'),
(309845, 29542, 'MetaValueOld', '<p dir=\"LTR\" align=\"LEFT\">Qatar is taking extensive positive steps to improve its legislative system. This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p>\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>&nbsp;\r\n&nbsp;<img class=\"aligncenter size-full wp-image-8273\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_274361663.jpg\" alt=\"\" width=\"1000\" height=\"364\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>'),
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(309848, 29542, 'ReportText', '<p dir=\"LTR\" align=\"LEFT\">Qatar is taking extensive positive steps to improve its legislative system. This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p>\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>&nbsp;\r\n&nbsp;<img class=\"aligncenter size-full wp-image-8273\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_274361663.jpg\" alt=\"\" width=\"1000\" height=\"364\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>|<p dir=\"LTR\" align=\"LEFT\">Qatar is taking extensive positive steps to improve its legislative system. This has been reflected in various new laws, regulations and amendments coming into force during the past year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we highlight some of the more interesting recent legislative changes.</p>\r\n&nbsp;\r\n\r\n&nbsp;<img class=\"aligncenter wp-image-8267 size-full\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_31_Image_0002d.jpg\" alt=\"\" width=\"1096\" height=\"310\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Consumer Protection Law amendment released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Law Number 7 of 2018 amending Law 8 of 2008 on Consumer Protection was published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment, as expected, imposes stricter administrative punishments, in addition to the existing administrative and criminal sanctions, which include imprisonment and/or fines.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The amendment extends Article 18 bis, which is the provision that grants the Consumer Protection Department’s the authority to temporary close the infringing shop or place of business for a period not exceeding one month for the first violation, two months for the second violation, and three months for any further violations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to publishing the closure decision on the Ministry’s website and in two daily newspapers, the amendment imposes a notice of violation to be placed on the offending shop or place of business alerting consumers to the reason of the closure being due to violations of the Consumer Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This amendment adds to the significant role of the Qatari Consumer Protection Department, by further publicising the violation to consumers, making the administrative action more effective and preventive.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The Issuance of the Patents Implementing Regulation</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Patents Implementing Regulation Number 153 of 2018 was also published in the Qatari Official Gazette Number 11 dated 4 July 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Patents in Qatar are governed by the provisions of Law Number 30 of 2006. This law has not been updated since its issuance, and was put into place without being accompanied by any implementing regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the recent developments, including the issuance of the long awaited implementing regulations, are in line with the Qatar National Vision 2030, including the national strategic plan improving IP enforcement and protection, and are assigned to a specialised committee in accordance with decision Number 45 of 2017. Accordingly, further improvements and regulations are also expected to be issued soon.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new patents implementing regulation specifies procedures related to registration of patents, including granting the Patent Office the authority to accept submission of supporting documents within a maximum six month period of filing a patent application. In case of non-compliance within the six month period, the patent application shall be considered abandoned, in accordance with Article 2 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the maximum period granted by the Patent Office for filing supporting documents in cases of priority claims is three months, as per Article 3 of the regulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 8 of the regulations confirm that the Patent Office may use the assistance of experts in the relevant field within the examination process, and the applicant is to cover the cost of such experts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These regulations are expected to enhance the efficiency of the patent registration process in Qatar.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Law on Competitiveness of National Products to be released</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In June 2018, Qatar’s Advisory Council discussed a draft law on supporting the competitiveness of national products and combating harmful practices in international trade. The draft law was referred to the Financial and Economic Affairs Committee for its examination and for the Committee to report back to the Council with their comments.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The draft law confirms complying with Qatar’s international obligations as per the World Trade Organisation (WTO) Agreements signed by Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This law also supports Qatar’s aim to achieve self-sufficiency and food security.</p>&nbsp;\r\n&nbsp;<img class=\"aligncenter size-full wp-image-8273\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_274361663.jpg\" alt=\"\" width=\"1000\" height=\"364\" />&nbsp;\r\n&nbsp;<h3 dir=\"LTR\" align=\"LEFT\">Foreign investment and Trade - Agreements signed and further laws under discussion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qatar launched direct maritime shipping lines with many counties including Kuwait, Oman, India, Pakistan, Turkey and Iraq, in addition to Jordan. This was in line with the entry into bilateral agreements with many countries with the aim of improving trade relationships and encouraging foreign investment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, Qatar has announced that the cabinet had approved draft legislation governing investment of non-Qatari capital in the economy. It is said that the legislation will replace Law No 13 from 2000 to further open up the country to foreign investment in all sectors with several exceptions. The draft under discussion was not disclosed, accordingly, the details of this amendment are still unconfirmed, and it is uncertain when this law will be issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another law closely related to foreign investment is also expected to be released, administering ownership of real estate by non-Qatari citizens. The law is likely to define certain areas on which such ownership is permissible and the conditions to apply to the same, as well as granting heirs of the owner the same ownership rights after the death of the owner.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Encouraging foreign investment is essential for economic development. By providing the needed legal tools to safeguard the interests of domestic industries, consumers, and foreign investors, Qatar would appear to be moving in the right direction, by developing a robust and balanced legal and economic system.</p>\r\n<em>Our <a href=\"https://www.tamimi.com/practice/intellectual-property/\">IP department</a> has a dedicated team of experienced practitioners, who can assist in a wide range of contentious and non-contentious matters related to IP, including legal protection, contractual matters and litigation. For more information about our IP services or if you wish to enquire more about the above reported developments, please contact the author or <a href=\"https://www.tamimi.com/lawyer/omar-obeidat/\">Omar Obeidat</a> (Partner &amp; Head of Intellectual Property) at <a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>.</em>'),
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(309928, 29549, 'MetaValueNew', '<img class=\"aligncenter size-full wp-image-8249\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_21_Image_0002.jpg\" alt=\"\" width=\"1121\" height=\"337\" />\r\n<p dir=\"LTR\" align=\"LEFT\">Collaborating with a land owner, ground lease owner or developer (\"Landlords\") to lease a ‘build to suit’ school or other educational facility is becoming an increasingly popular means for educational facility operators (\"Tenants\") to meet their premises requirements in the UAE and broader region.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What is a build to suit arrangement?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In simple terms, a build to suit arrangement comprises the following elements:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a Landlord who is prepared to undertake the construction of the educational facility provided they have a long term Tenant;</li>\r\n 	<li dir=\"LTR\">a Tenant being a school or other educational institution provider who wishes to enter into a long term lease of an educational facility; and</li>\r\n 	<li dir=\"LTR\">in many instances financial institutions who may be prepared to finance the Landlord in constructing the educational facility on the basis that, once built, the Landlord will have the revenue streams under the long term lease.</li>\r\n</ul>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Why build to suit?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Private school operators or other educational institutions would prefer not to undertake the significant capital outlay required to acquire an interest in land and construct their own premises.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, developers and other investors have an appetite for singly owned and tenanted real estate assets with tenants who will take over the full operation and maintenance of the facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The pre-leasing aspect may also enable the Landlord to obtain finance for the project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, completing an education facility on a build to suit basis represents a win-win for operators, developers and investors. That said to avoid disputes arising at a later stage, build-to-suit projects can present a number of complexities that warrant careful consideration prior to entering into the relevant contractual documentation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What are the key legal elements of a build to suit transaction?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">While a detailed discussion of the issues and risk points is beyond the scope of this article, the following discussion points provide a high-level overview of the key legal elements to consider in a build to suit transaction:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Due diligence on the land plot</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The parties should ensure that the land is appropriate for the proposed development. This may include considerations such as: ensuring the plot has appropriate planning and other regulatory approvals; ensuring the physical layout of the plot is suitable for the proposed designs; ensuring proximity to necessary infrastructure and utilities; confirming sufficient permitted GFA; licensing and free zone considerations; and other operational and design issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a commercial perspective, the location of the plot will also be important, as patrons of a school or other educational facility will generally want this to be proximate to or easily accessible from their residence. Competitor schools in or planned for the locality may also be a consideration.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Scope of works</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A lack of clarity in the scope of the works is one of the key issues giving rise to disputes. As the rent and other obligations are often struck based on what the owner is expecting to deliver and what the tenant is expecting to receive (and the associated costs), aligning the parties expectations is key to minimising risk.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">To mitigate this risk, the parties should develop a clear scope of work at the outset. The parties should consider what plant and equipment is included in the scope of work, and whether the premises will be delivered in \"turn-key\" condition with all fit out installed as well as the extent to which equipment, furniture is included.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the context of a school or other educational facility, the design may have to meet the requirements of the regulators such as the Dubai Knowledge and Human Development Authority. In addition, many operators will have their own design requirements. It is recommended that, unless the Tenant has such capabilities in-house, the Tenant engage suitable consultants to prepare a detailed technical brief addressing such matters as design requirements, structural loads, utility capacities and regulatory requirements. The detailed technical brief should be attached to the final agreement giving clarity to both the Landlord and Tenant as to key specifications required.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.\"</h2>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Milestones and longstop dates</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Will the owner be required to achieve completion of stages of the relevant works by milestone dates, or to procure completion of the project prior to a longstop date? If one or both of these requirements apply, what are the consequences of the Landlord failing to adhere to the relevant dates? Are delay damages payable, or does failure to meet milestone or long stop dates give rise to a right for the Tenant to terminate the agreements?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In education projects, the date of completion can be critical as failure to achieve completion by a certain date could result in missing the window for enrolments for an entire year.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignright size-full wp-image-8275\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_710912206.jpg\" alt=\"\" width=\"454\" height=\"668\" />Calculation of rent</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the rent payable under the lease be determined? Considerations may include whether there will there be a base/ground rent component payable for the land.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent (or a component of the rent) is to be calculated against the project costs incurred by the owner, what costs are included/excluded for the purpose of making that calculation? Examples of common exclusions are the owner’s cost of acquiring the land (if applicable), the owner’s cost of financing the construction and the cost of delivering infrastructure to the boundary of the plot.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent is calculated with reference to the project costs or by some other methodology, the Tenant will be concerned to ensure that there is a cap on its liability. The Tenant may also require that the project costs be certified by an independent cost consultant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Often the rent is discounted at the beginning of the term with such discounts amortised over the remainder of the term. This practice recognises that it takes some time for the school or other educational facility to attract students and therefore improves the Tenant’s cash flows until such time as the school or other educational facility is established in the market.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Appointment of contractors</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the consultants and contractors undertaking the designs and works be appointed? Will mutual agreement be required? One option is for the parties to agree a short-list or pre-agree contractors and consultants whom the owner may engage. Alternatively, will there be a tender process and if yes, how will that be conducted and what role will the Tenant play in selecting the preferred tender? Will the Tenant have the right to approve the terms of the third party contracts?</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Development of detailed designs and construction drawings</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, detailed designs and specifications would be developed and attached to the contractual documents. However, often the project design is not finalised at the time when contractual documents are entered into. In those circumstances, the parties must agree on the mechanism for setting the final design requirements on which the project will be undertaken.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Variations</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Issues to consider include whether variations (by the Landlord, Tenant or both parties) will be permitted once the final designs and specifications are settled. If variations are permitted, what parameters or processes will apply to determine whether the variation will be implemented and on what grounds may a variation be refused (and the grounds of refusal may differ depending on which party is approving the variation). For example, where a variation would result in a material delay to the works program or result in a material increase in project costs, one party may be entitled to withhold its approval.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Retention of a specialist consultant by the tenant</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Unless the Tenant retains specialist architects and/or engineers in house, it is recommended that the Tenant obtain its own architectural and/or engineering consulting firm throughout the design, construction and handover phases of the project. The Tenant’s consultant may assist with the following tasks:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">ensuring the design brief meets the Tenant’s and any regulator’s requirements;</li>\r\n 	<li dir=\"LTR\">where permitted under the contractual documentation, consulting with the Landlord on the appointment of any contractor or sub-contractor;</li>\r\n 	<li dir=\"LTR\">supervising the contractor and sub-contractors to ensure they are meeting the design brief;</li>\r\n 	<li dir=\"LTR\">assessing any requests from the Landlord or the Tenant to make variations and evaluating the cost of such variations;</li>\r\n 	<li dir=\"LTR\">cost consulting; and</li>\r\n 	<li dir=\"LTR\">assessing whether milestones are met and whether the school is ready for handover.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Independent Experts</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">If disputes arise during the process, this could lead to delays in completing or the handover of the project, particularly where the disputes may be of a technical nature.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst each party having its own consultant engaged may reduce the likelihood of disputes, it will not remove the risk completely as it remains possible that the respective parties’ consultants will disagree.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In these circumstances, it can be useful to have an independent consultant appointed to mediate and determine such disputes as an expert.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Documentation</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Transaction documents from a Tenant’s perspective would typically include an agreement to lease and the occupational lease. Where acting for the Landlord, ground lease, financing, construction and development management documentation may be required.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The terms of the occupational lease are often critical, particularly given that the parties generally require a long-term arrangement. The parties should accordingly consider carefully the maintaining and repairing obligations and obligations for other outgoings, taxation issues, rent reviews, reinstatement obligations and insurance as well as the other usual Landlord and Tenant considerations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Obligations in relation to registration of leases and any resulting registration fees should also be considered.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Build to suit arrangements are not the only option for private school or educational institutions when setting up operations however they provide a useful option from, both the Landlord’s and the educational institutions perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Readers will appreciate that there are a large number of issues to be considered prior to entering into build to suit projects and the above snapshot is by no means exhaustive. However, ensuring that the parties have a clear understanding and agreed position on these types of issues goes a long way to ensuring a successful project.</p>\r\n<em>Al Tamimi &amp; Company’s, <a href=\"https://www.tamimi.com/lawyer/jeremy-scott/\">Jeremy Scott</a>, regularly advises on various <a href=\"https://www.tamimi.com/practice/real-estate/\">real estate matters</a> in the UAE and other countries in the GCC. For further information please contact Jeremy Scott (<a href=\"mailto:j.scott@tamimi.com\">j.scott@tamimi.com</a>).</em>'),
(309929, 29549, 'MetaValueOld', '<img class=\"aligncenter size-full wp-image-8249\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_21_Image_0002.jpg\" alt=\"\" width=\"1121\" height=\"337\" />&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Collaborating with a land owner, ground lease owner or developer (\"Landlords\") to lease a ‘build to suit’ school or other educational facility is becoming an increasingly popular means for educational facility operators (\"Tenants\") to meet their premises requirements in the UAE and broader region.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What is a build to suit arrangement?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In simple terms, a build to suit arrangement comprises the following elements:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a Landlord who is prepared to undertake the construction of the educational facility provided they have a long term Tenant;</li>\r\n 	<li dir=\"LTR\">a Tenant being a school or other educational institution provider who wishes to enter into a long term lease of an educational facility; and</li>\r\n 	<li dir=\"LTR\">in many instances financial institutions who may be prepared to finance the Landlord in constructing the educational facility on the basis that, once built, the Landlord will have the revenue streams under the long term lease.</li>\r\n</ul>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Why build to suit?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Private school operators or other educational institutions would prefer not to undertake the significant capital outlay required to acquire an interest in land and construct their own premises.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, developers and other investors have an appetite for singly owned and tenanted real estate assets with tenants who will take over the full operation and maintenance of the facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The pre-leasing aspect may also enable the Landlord to obtain finance for the project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, completing an education facility on a build to suit basis represents a win-win for operators, developers and investors. That said to avoid disputes arising at a later stage, build-to-suit projects can present a number of complexities that warrant careful consideration prior to entering into the relevant contractual documentation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What are the key legal elements of a build to suit transaction?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">While a detailed discussion of the issues and risk points is beyond the scope of this article, the following discussion points provide a high-level overview of the key legal elements to consider in a build to suit transaction:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Due diligence on the land plot</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The parties should ensure that the land is appropriate for the proposed development. This may include considerations such as: ensuring the plot has appropriate planning and other regulatory approvals; ensuring the physical layout of the plot is suitable for the proposed designs; ensuring proximity to necessary infrastructure and utilities; confirming sufficient permitted GFA; licensing and free zone considerations; and other operational and design issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a commercial perspective, the location of the plot will also be important, as patrons of a school or other educational facility will generally want this to be proximate to or easily accessible from their residence. Competitor schools in or planned for the locality may also be a consideration.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Scope of works</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A lack of clarity in the scope of the works is one of the key issues giving rise to disputes. As the rent and other obligations are often struck based on what the owner is expecting to deliver and what the tenant is expecting to receive (and the associated costs), aligning the parties expectations is key to minimising risk.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">To mitigate this risk, the parties should develop a clear scope of work at the outset. The parties should consider what plant and equipment is included in the scope of work, and whether the premises will be delivered in \"turn-key\" condition with all fit out installed as well as the extent to which equipment, furniture is included.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the context of a school or other educational facility, the design may have to meet the requirements of the regulators such as the Dubai Knowledge and Human Development Authority. In addition, many operators will have their own design requirements. It is recommended that, unless the Tenant has such capabilities in-house, the Tenant engage suitable consultants to prepare a detailed technical brief addressing such matters as design requirements, structural loads, utility capacities and regulatory requirements. The detailed technical brief should be attached to the final agreement giving clarity to both the Landlord and Tenant as to key specifications required.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.\"</h2>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Milestones and longstop dates</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Will the owner be required to achieve completion of stages of the relevant works by milestone dates, or to procure completion of the project prior to a longstop date? If one or both of these requirements apply, what are the consequences of the Landlord failing to adhere to the relevant dates? Are delay damages payable, or does failure to meet milestone or long stop dates give rise to a right for the Tenant to terminate the agreements?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In education projects, the date of completion can be critical as failure to achieve completion by a certain date could result in missing the window for enrolments for an entire year.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Calculation of rent</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the rent payable under the lease be determined? Considerations may include whether there will there be a base/ground rent component payable for the land.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent (or a component of the rent) is to be calculated against the project costs incurred by the owner, what costs are included/excluded for the purpose of making that calculation? Examples of common exclusions are the owner’s cost of acquiring the land (if applicable), the owner’s cost of financing the construction and the cost of delivering infrastructure to the boundary of the plot.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent is calculated with reference to the project costs or by some other methodology, the Tenant will be concerned to ensure that there is a cap on its liability. The Tenant may also require that the project costs be certified by an independent cost consultant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Often the rent is discounted at the beginning of the term with such discounts amortised over the remainder of the term. This practice recognises that it takes some time for the school or other educational facility to attract students and therefore improves the Tenant’s cash flows until such time as the school or other educational facility is established in the market.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Appointment of contractors</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the consultants and contractors undertaking the designs and works be appointed? Will mutual agreement be required? One option is for the parties to agree a short-list or pre-agree contractors and consultants whom the owner may engage. Alternatively, will there be a tender process and if yes, how will that be conducted and what role will the Tenant play in selecting the preferred tender? Will the Tenant have the right to approve the terms of the third party contracts?</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Development of detailed designs and construction drawings</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, detailed designs and specifications would be developed and attached to the contractual documents. However, often the project design is not finalised at the time when contractual documents are entered into. In those circumstances, the parties must agree on the mechanism for setting the final design requirements on which the project will be undertaken.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Variations</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Issues to consider include whether variations (by the Landlord, Tenant or both parties) will be permitted once the final designs and specifications are settled. If variations are permitted, what parameters or processes will apply to determine whether the variation will be implemented and on what grounds may a variation be refused (and the grounds of refusal may differ depending on which party is approving the variation). For example, where a variation would result in a material delay to the works program or result in a material increase in project costs, one party may be entitled to withhold its approval.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Retention of a specialist consultant by the tenant</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Unless the Tenant retains specialist architects and/or engineers in house, it is recommended that the Tenant obtain its own architectural and/or engineering consulting firm throughout the design, construction and handover phases of the project. The Tenant’s consultant may assist with the following tasks:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">ensuring the design brief meets the Tenant’s and any regulator’s requirements;</li>\r\n 	<li dir=\"LTR\">where permitted under the contractual documentation, consulting with the Landlord on the appointment of any contractor or sub-contractor;</li>\r\n 	<li dir=\"LTR\">supervising the contractor and sub-contractors to ensure they are meeting the design brief;</li>\r\n 	<li dir=\"LTR\">assessing any requests from the Landlord or the Tenant to make variations and evaluating the cost of such variations;</li>\r\n 	<li dir=\"LTR\">cost consulting; and</li>\r\n 	<li dir=\"LTR\">assessing whether milestones are met and whether the school is ready for handover.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Independent Experts</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">If disputes arise during the process, this could lead to delays in completing or the handover of the project, particularly where the disputes may be of a technical nature.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst each party having its own consultant engaged may reduce the likelihood of disputes, it will not remove the risk completely as it remains possible that the respective parties’ consultants will disagree.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In these circumstances, it can be useful to have an independent consultant appointed to mediate and determine such disputes as an expert.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Documentation</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Transaction documents from a Tenant’s perspective would typically include an agreement to lease and the occupational lease. Where acting for the Landlord, ground lease, financing, construction and development management documentation may be required.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The terms of the occupational lease are often critical, particularly given that the parties generally require a long-term arrangement. The parties should accordingly consider carefully the maintaining and repairing obligations and obligations for other outgoings, taxation issues, rent reviews, reinstatement obligations and insurance as well as the other usual Landlord and Tenant considerations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Obligations in relation to registration of leases and any resulting registration fees should also be considered.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Build to suit arrangements are not the only option for private school or educational institutions when setting up operations however they provide a useful option from, both the Landlord’s and the educational institutions perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Readers will appreciate that there are a large number of issues to be considered prior to entering into build to suit projects and the above snapshot is by no means exhaustive. However, ensuring that the parties have a clear understanding and agreed position on these types of issues goes a long way to ensuring a successful project.</p>\r\n<em>Al Tamimi &amp; Company’s, <a href=\"https://www.tamimi.com/lawyer/jeremy-scott/\">Jeremy Scott</a>, regularly advises on various <a href=\"https://www.tamimi.com/practice/real-estate/\">real estate matters</a> in the UAE and other countries in the GCC. For further information please contact Jeremy Scott (<a href=\"mailto:j.scott@tamimi.com\">j.scott@tamimi.com</a>).</em>'),
(309930, 29549, 'MetaLink', 'content'),
(309931, 29549, 'EditorLinkPost', 'https://www.tamimi.com/wp-admin/post.php?post=8198&amp;action=edit');
INSERT INTO `tm_wsal_metadata` (`id`, `occurrence_id`, `name`, `value`) VALUES
(309932, 29549, 'ReportText', '<img class=\"aligncenter size-full wp-image-8249\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_21_Image_0002.jpg\" alt=\"\" width=\"1121\" height=\"337\" />&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Collaborating with a land owner, ground lease owner or developer (\"Landlords\") to lease a ‘build to suit’ school or other educational facility is becoming an increasingly popular means for educational facility operators (\"Tenants\") to meet their premises requirements in the UAE and broader region.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What is a build to suit arrangement?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In simple terms, a build to suit arrangement comprises the following elements:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a Landlord who is prepared to undertake the construction of the educational facility provided they have a long term Tenant;</li>\r\n 	<li dir=\"LTR\">a Tenant being a school or other educational institution provider who wishes to enter into a long term lease of an educational facility; and</li>\r\n 	<li dir=\"LTR\">in many instances financial institutions who may be prepared to finance the Landlord in constructing the educational facility on the basis that, once built, the Landlord will have the revenue streams under the long term lease.</li>\r\n</ul>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Why build to suit?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Private school operators or other educational institutions would prefer not to undertake the significant capital outlay required to acquire an interest in land and construct their own premises.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, developers and other investors have an appetite for singly owned and tenanted real estate assets with tenants who will take over the full operation and maintenance of the facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The pre-leasing aspect may also enable the Landlord to obtain finance for the project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, completing an education facility on a build to suit basis represents a win-win for operators, developers and investors. That said to avoid disputes arising at a later stage, build-to-suit projects can present a number of complexities that warrant careful consideration prior to entering into the relevant contractual documentation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What are the key legal elements of a build to suit transaction?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">While a detailed discussion of the issues and risk points is beyond the scope of this article, the following discussion points provide a high-level overview of the key legal elements to consider in a build to suit transaction:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Due diligence on the land plot</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The parties should ensure that the land is appropriate for the proposed development. This may include considerations such as: ensuring the plot has appropriate planning and other regulatory approvals; ensuring the physical layout of the plot is suitable for the proposed designs; ensuring proximity to necessary infrastructure and utilities; confirming sufficient permitted GFA; licensing and free zone considerations; and other operational and design issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a commercial perspective, the location of the plot will also be important, as patrons of a school or other educational facility will generally want this to be proximate to or easily accessible from their residence. Competitor schools in or planned for the locality may also be a consideration.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Scope of works</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A lack of clarity in the scope of the works is one of the key issues giving rise to disputes. As the rent and other obligations are often struck based on what the owner is expecting to deliver and what the tenant is expecting to receive (and the associated costs), aligning the parties expectations is key to minimising risk.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">To mitigate this risk, the parties should develop a clear scope of work at the outset. The parties should consider what plant and equipment is included in the scope of work, and whether the premises will be delivered in \"turn-key\" condition with all fit out installed as well as the extent to which equipment, furniture is included.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the context of a school or other educational facility, the design may have to meet the requirements of the regulators such as the Dubai Knowledge and Human Development Authority. In addition, many operators will have their own design requirements. It is recommended that, unless the Tenant has such capabilities in-house, the Tenant engage suitable consultants to prepare a detailed technical brief addressing such matters as design requirements, structural loads, utility capacities and regulatory requirements. The detailed technical brief should be attached to the final agreement giving clarity to both the Landlord and Tenant as to key specifications required.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.\"</h2>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Milestones and longstop dates</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Will the owner be required to achieve completion of stages of the relevant works by milestone dates, or to procure completion of the project prior to a longstop date? If one or both of these requirements apply, what are the consequences of the Landlord failing to adhere to the relevant dates? Are delay damages payable, or does failure to meet milestone or long stop dates give rise to a right for the Tenant to terminate the agreements?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In education projects, the date of completion can be critical as failure to achieve completion by a certain date could result in missing the window for enrolments for an entire year.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Calculation of rent</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the rent payable under the lease be determined? Considerations may include whether there will there be a base/ground rent component payable for the land.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent (or a component of the rent) is to be calculated against the project costs incurred by the owner, what costs are included/excluded for the purpose of making that calculation? Examples of common exclusions are the owner’s cost of acquiring the land (if applicable), the owner’s cost of financing the construction and the cost of delivering infrastructure to the boundary of the plot.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent is calculated with reference to the project costs or by some other methodology, the Tenant will be concerned to ensure that there is a cap on its liability. The Tenant may also require that the project costs be certified by an independent cost consultant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Often the rent is discounted at the beginning of the term with such discounts amortised over the remainder of the term. This practice recognises that it takes some time for the school or other educational facility to attract students and therefore improves the Tenant’s cash flows until such time as the school or other educational facility is established in the market.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Appointment of contractors</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the consultants and contractors undertaking the designs and works be appointed? Will mutual agreement be required? One option is for the parties to agree a short-list or pre-agree contractors and consultants whom the owner may engage. Alternatively, will there be a tender process and if yes, how will that be conducted and what role will the Tenant play in selecting the preferred tender? Will the Tenant have the right to approve the terms of the third party contracts?</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Development of detailed designs and construction drawings</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, detailed designs and specifications would be developed and attached to the contractual documents. However, often the project design is not finalised at the time when contractual documents are entered into. In those circumstances, the parties must agree on the mechanism for setting the final design requirements on which the project will be undertaken.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Variations</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Issues to consider include whether variations (by the Landlord, Tenant or both parties) will be permitted once the final designs and specifications are settled. If variations are permitted, what parameters or processes will apply to determine whether the variation will be implemented and on what grounds may a variation be refused (and the grounds of refusal may differ depending on which party is approving the variation). For example, where a variation would result in a material delay to the works program or result in a material increase in project costs, one party may be entitled to withhold its approval.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Retention of a specialist consultant by the tenant</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Unless the Tenant retains specialist architects and/or engineers in house, it is recommended that the Tenant obtain its own architectural and/or engineering consulting firm throughout the design, construction and handover phases of the project. The Tenant’s consultant may assist with the following tasks:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">ensuring the design brief meets the Tenant’s and any regulator’s requirements;</li>\r\n 	<li dir=\"LTR\">where permitted under the contractual documentation, consulting with the Landlord on the appointment of any contractor or sub-contractor;</li>\r\n 	<li dir=\"LTR\">supervising the contractor and sub-contractors to ensure they are meeting the design brief;</li>\r\n 	<li dir=\"LTR\">assessing any requests from the Landlord or the Tenant to make variations and evaluating the cost of such variations;</li>\r\n 	<li dir=\"LTR\">cost consulting; and</li>\r\n 	<li dir=\"LTR\">assessing whether milestones are met and whether the school is ready for handover.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Independent Experts</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">If disputes arise during the process, this could lead to delays in completing or the handover of the project, particularly where the disputes may be of a technical nature.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst each party having its own consultant engaged may reduce the likelihood of disputes, it will not remove the risk completely as it remains possible that the respective parties’ consultants will disagree.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In these circumstances, it can be useful to have an independent consultant appointed to mediate and determine such disputes as an expert.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Documentation</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Transaction documents from a Tenant’s perspective would typically include an agreement to lease and the occupational lease. Where acting for the Landlord, ground lease, financing, construction and development management documentation may be required.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The terms of the occupational lease are often critical, particularly given that the parties generally require a long-term arrangement. The parties should accordingly consider carefully the maintaining and repairing obligations and obligations for other outgoings, taxation issues, rent reviews, reinstatement obligations and insurance as well as the other usual Landlord and Tenant considerations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Obligations in relation to registration of leases and any resulting registration fees should also be considered.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Build to suit arrangements are not the only option for private school or educational institutions when setting up operations however they provide a useful option from, both the Landlord’s and the educational institutions perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Readers will appreciate that there are a large number of issues to be considered prior to entering into build to suit projects and the above snapshot is by no means exhaustive. However, ensuring that the parties have a clear understanding and agreed position on these types of issues goes a long way to ensuring a successful project.</p>\r\n<em>Al Tamimi &amp; Company’s, <a href=\"https://www.tamimi.com/lawyer/jeremy-scott/\">Jeremy Scott</a>, regularly advises on various <a href=\"https://www.tamimi.com/practice/real-estate/\">real estate matters</a> in the UAE and other countries in the GCC. For further information please contact Jeremy Scott (<a href=\"mailto:j.scott@tamimi.com\">j.scott@tamimi.com</a>).</em>|<img class=\"aligncenter size-full wp-image-8249\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/August-Edition-DPS_Page_21_Image_0002.jpg\" alt=\"\" width=\"1121\" height=\"337\" />\r\n<p dir=\"LTR\" align=\"LEFT\">Collaborating with a land owner, ground lease owner or developer (\"Landlords\") to lease a ‘build to suit’ school or other educational facility is becoming an increasingly popular means for educational facility operators (\"Tenants\") to meet their premises requirements in the UAE and broader region.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What is a build to suit arrangement?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In simple terms, a build to suit arrangement comprises the following elements:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a Landlord who is prepared to undertake the construction of the educational facility provided they have a long term Tenant;</li>\r\n 	<li dir=\"LTR\">a Tenant being a school or other educational institution provider who wishes to enter into a long term lease of an educational facility; and</li>\r\n 	<li dir=\"LTR\">in many instances financial institutions who may be prepared to finance the Landlord in constructing the educational facility on the basis that, once built, the Landlord will have the revenue streams under the long term lease.</li>\r\n</ul>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Why build to suit?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Private school operators or other educational institutions would prefer not to undertake the significant capital outlay required to acquire an interest in land and construct their own premises.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, developers and other investors have an appetite for singly owned and tenanted real estate assets with tenants who will take over the full operation and maintenance of the facility.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The pre-leasing aspect may also enable the Landlord to obtain finance for the project.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, completing an education facility on a build to suit basis represents a win-win for operators, developers and investors. That said to avoid disputes arising at a later stage, build-to-suit projects can present a number of complexities that warrant careful consideration prior to entering into the relevant contractual documentation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">What are the key legal elements of a build to suit transaction?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">While a detailed discussion of the issues and risk points is beyond the scope of this article, the following discussion points provide a high-level overview of the key legal elements to consider in a build to suit transaction:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Due diligence on the land plot</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The parties should ensure that the land is appropriate for the proposed development. This may include considerations such as: ensuring the plot has appropriate planning and other regulatory approvals; ensuring the physical layout of the plot is suitable for the proposed designs; ensuring proximity to necessary infrastructure and utilities; confirming sufficient permitted GFA; licensing and free zone considerations; and other operational and design issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a commercial perspective, the location of the plot will also be important, as patrons of a school or other educational facility will generally want this to be proximate to or easily accessible from their residence. Competitor schools in or planned for the locality may also be a consideration.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Scope of works</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A lack of clarity in the scope of the works is one of the key issues giving rise to disputes. As the rent and other obligations are often struck based on what the owner is expecting to deliver and what the tenant is expecting to receive (and the associated costs), aligning the parties expectations is key to minimising risk.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">To mitigate this risk, the parties should develop a clear scope of work at the outset. The parties should consider what plant and equipment is included in the scope of work, and whether the premises will be delivered in \"turn-key\" condition with all fit out installed as well as the extent to which equipment, furniture is included.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the context of a school or other educational facility, the design may have to meet the requirements of the regulators such as the Dubai Knowledge and Human Development Authority. In addition, many operators will have their own design requirements. It is recommended that, unless the Tenant has such capabilities in-house, the Tenant engage suitable consultants to prepare a detailed technical brief addressing such matters as design requirements, structural loads, utility capacities and regulatory requirements. The detailed technical brief should be attached to the final agreement giving clarity to both the Landlord and Tenant as to key specifications required.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"Part of what makes build to suit arrangements so attractive, is that they are inherently flexible in their scope and structure. Parties can readily adapt the commercial arrangement to reach a mutually agreeable position on both the development and leasing aspects.\"</h2>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Milestones and longstop dates</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Will the owner be required to achieve completion of stages of the relevant works by milestone dates, or to procure completion of the project prior to a longstop date? If one or both of these requirements apply, what are the consequences of the Landlord failing to adhere to the relevant dates? Are delay damages payable, or does failure to meet milestone or long stop dates give rise to a right for the Tenant to terminate the agreements?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In education projects, the date of completion can be critical as failure to achieve completion by a certain date could result in missing the window for enrolments for an entire year.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignright size-full wp-image-8275\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_710912206.jpg\" alt=\"\" width=\"454\" height=\"668\" />Calculation of rent</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the rent payable under the lease be determined? Considerations may include whether there will there be a base/ground rent component payable for the land.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent (or a component of the rent) is to be calculated against the project costs incurred by the owner, what costs are included/excluded for the purpose of making that calculation? Examples of common exclusions are the owner’s cost of acquiring the land (if applicable), the owner’s cost of financing the construction and the cost of delivering infrastructure to the boundary of the plot.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where the rent is calculated with reference to the project costs or by some other methodology, the Tenant will be concerned to ensure that there is a cap on its liability. The Tenant may also require that the project costs be certified by an independent cost consultant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Often the rent is discounted at the beginning of the term with such discounts amortised over the remainder of the term. This practice recognises that it takes some time for the school or other educational facility to attract students and therefore improves the Tenant’s cash flows until such time as the school or other educational facility is established in the market.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Appointment of contractors</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">How will the consultants and contractors undertaking the designs and works be appointed? Will mutual agreement be required? One option is for the parties to agree a short-list or pre-agree contractors and consultants whom the owner may engage. Alternatively, will there be a tender process and if yes, how will that be conducted and what role will the Tenant play in selecting the preferred tender? Will the Tenant have the right to approve the terms of the third party contracts?</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Development of detailed designs and construction drawings</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Ideally, detailed designs and specifications would be developed and attached to the contractual documents. However, often the project design is not finalised at the time when contractual documents are entered into. In those circumstances, the parties must agree on the mechanism for setting the final design requirements on which the project will be undertaken.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Variations</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Issues to consider include whether variations (by the Landlord, Tenant or both parties) will be permitted once the final designs and specifications are settled. If variations are permitted, what parameters or processes will apply to determine whether the variation will be implemented and on what grounds may a variation be refused (and the grounds of refusal may differ depending on which party is approving the variation). For example, where a variation would result in a material delay to the works program or result in a material increase in project costs, one party may be entitled to withhold its approval.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Retention of a specialist consultant by the tenant</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Unless the Tenant retains specialist architects and/or engineers in house, it is recommended that the Tenant obtain its own architectural and/or engineering consulting firm throughout the design, construction and handover phases of the project. The Tenant’s consultant may assist with the following tasks:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">ensuring the design brief meets the Tenant’s and any regulator’s requirements;</li>\r\n 	<li dir=\"LTR\">where permitted under the contractual documentation, consulting with the Landlord on the appointment of any contractor or sub-contractor;</li>\r\n 	<li dir=\"LTR\">supervising the contractor and sub-contractors to ensure they are meeting the design brief;</li>\r\n 	<li dir=\"LTR\">assessing any requests from the Landlord or the Tenant to make variations and evaluating the cost of such variations;</li>\r\n 	<li dir=\"LTR\">cost consulting; and</li>\r\n 	<li dir=\"LTR\">assessing whether milestones are met and whether the school is ready for handover.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Independent Experts</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">If disputes arise during the process, this could lead to delays in completing or the handover of the project, particularly where the disputes may be of a technical nature.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst each party having its own consultant engaged may reduce the likelihood of disputes, it will not remove the risk completely as it remains possible that the respective parties’ consultants will disagree.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In these circumstances, it can be useful to have an independent consultant appointed to mediate and determine such disputes as an expert.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Documentation</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Transaction documents from a Tenant’s perspective would typically include an agreement to lease and the occupational lease. Where acting for the Landlord, ground lease, financing, construction and development management documentation may be required.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The terms of the occupational lease are often critical, particularly given that the parties generally require a long-term arrangement. The parties should accordingly consider carefully the maintaining and repairing obligations and obligations for other outgoings, taxation issues, rent reviews, reinstatement obligations and insurance as well as the other usual Landlord and Tenant considerations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Obligations in relation to registration of leases and any resulting registration fees should also be considered.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Build to suit arrangements are not the only option for private school or educational institutions when setting up operations however they provide a useful option from, both the Landlord’s and the educational institutions perspective.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Readers will appreciate that there are a large number of issues to be considered prior to entering into build to suit projects and the above snapshot is by no means exhaustive. However, ensuring that the parties have a clear understanding and agreed position on these types of issues goes a long way to ensuring a successful project.</p>\r\n<em>Al Tamimi &amp; Company’s, <a href=\"https://www.tamimi.com/lawyer/jeremy-scott/\">Jeremy Scott</a>, regularly advises on various <a href=\"https://www.tamimi.com/practice/real-estate/\">real estate matters</a> in the UAE and other countries in the GCC. For further information please contact Jeremy Scott (<a href=\"mailto:j.scott@tamimi.com\">j.scott@tamimi.com</a>).</em>'),
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(309964, 29552, 'PostTitle', 'Technology outsourcing in the Saudi financial services sector: The SAMA Outsourcing Rules'),
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(309966, 29552, 'PostDate', '2018-09-04 07:32:55'),
(309967, 29552, 'PostUrl', 'https://www.tamimi.com/law-update-articles/technology-outsourcing-in-the-saudi-financial-services-sector-the-sama-outsourcing-rules/'),
(309968, 29552, 'EditorLinkPost', 'https://www.tamimi.com/wp-admin/post.php?post=8206&amp;action=edit'),
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(309975, 29553, 'PostTitle', 'Technology outsourcing in the Saudi financial services sector: The SAMA Outsourcing Rules'),
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(309978, 29553, 'PostDate', '2018-09-04 07:32:55'),
(309979, 29553, 'PostUrl', 'https://www.tamimi.com/law-update-articles/technology-outsourcing-in-the-saudi-financial-services-sector-the-sama-outsourcing-rules/'),
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(309981, 29553, 'MetaKey', 'content'),
(309982, 29553, 'MetaValueNew', '<img src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_632368769.jpg\" alt=\"\" width=\"1000\" height=\"315\" class=\"aligncenter size-full wp-image-8274\" />&nbsp;\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">There have been significant changes in technology and regulation since 2008, when the Saudi Arabian Monetary Authority (SAMA) issued Circular No. 424 B.C.S / 34720 – the SAMA Rules of Outsourcing Processes. In this article, we summarise key aspects of the \"Outsourcing Rules\" with a focus on the outsourcing of information technology services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing is a business practice in which a business engages external service providers to perform certain business functions, instead of having those functions performed by its own personnel. The increasing complexity of the outsourcing arrangements adopted by banks, and the potential harm to consumers from offshoring arrangements out of reach of regulators, led to a 2005 report by the Basel Committee on Banking Supervision. The report contained recommendations about tightening the way in which banks outsourced their activities. SAMA subsequently issued the Outsourcing Rules in 2008.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The stated objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences. The Outsourcing Rules apply to branches of foreign banks in the Kingdom, as well as to domestic banks licensed under the Banking Control Law issued under Royal Decree No. M/5 dated 22/2/1386H (12 June 1966).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Engaging third party service providers can enable banks to reduce costs and obtain other efficiencies, but it may also expose banks to a variety of risks. These can include operational and reputational risks, such as when service providers fail in their performance, when security or confidentiality breaches result, or where the service providers’ actions otherwise result in banks failing to comply with statutory or regulatory obligations. Additionally, the whole banking sector could be at risk if a common service provider to a number of banks fails in its performance of the services entrusted to it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing basic work and non-basic work</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules split those functions and tasks that can be outsourced into two main categories – ‘basic works’ and ‘non-basic works’. There are different considerations for outsourcing each of these categories of works, and there is a general prohibition (with some exceptions) on the outsourcing of works relating to customer data processing.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Basic works refer broadly to the core tasks and responsibilities that banks have towards their customers. The operation of a bank’s information technology system is a prime example of basic works. Other examples include all customer-facing tasks (e.g. account opening, funds management, bank statements and transfers and payments), as well as human resources and marketing.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks are required to apply more rigour and diligence when outsourcing basic works, given the more serious consequences if the arrangement results in non-delivery of services. For that reason, the outsourcing of basic works is generally not permitted, unless the bank first obtains permission from SAMA. The Outsourcing Rules contain detailed requirements about what must be addressed in outsourcing contracts for basic works, and these are primarily aimed at reducing the potential harm that could result from outsourcing these core tasks and responsibilities.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignright wp-image-8222\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/11.jpg\" alt=\"\" width=\"443\" height=\"309\" />Non-basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In contrast, non-basic works include services that are common to many businesses, and where outsourcing does not pose serious risk to customers. Examples include cleaning, printing and postal functions. Non-basic works may be assigned to third party service providers without first obtaining confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Traditionally, banks would assign many non-basic works to third party service providers as a matter of course, and this may not have been considered ‘outsourcing’. Despite this, there may be implications for the outsourcing of such works in the Outsourcing Rules, so agreements relating to such works still need to be reviewed for compliance.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences.\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Risk evaluation and management</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require senior management within banks to ensure that risks for existing and potential outsourcing agreements are considered and addressed. For the assignment of basic works, a thorough risk evaluation needs to be undertaken for all new contracts and contract renewals. For non-basic works, a thorough review is only required where there are substantive changes to the deliverables under an outsourcing arrangement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks must properly investigate a service provider’s ability to undertake the contemplated services. Once a service provider is appointed, there is an obligation on the bank to monitor the service provider’s performance to ensure that the work is being done in accordance with the bank’s requirements.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing contracts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require banks to put in place comprehensive outsourcing contracts with service providers. These contracts need to address a variety of requirements, including scope of work, service levels and performance requirements, control and audit procedures, business continuity, pricing, confidentiality and privacy, information security, effects of breach and dispute resolution. The Outsourcing Rules indicate that it is preferable for governing law and jurisdiction of outsourcing contracts be that of Saudi Arabia.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There is a requirement for outsourcing contracts to restrict service providers from sub-contracting any of the subject services without the prior consent of the banks, and subject to obtaining prior confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where customer data or financial statements are to be made available to a service provider in performance of outsourced services, it is necessary to ensure that the contractual arrangement reflects the confidentiality obligations set out in the Banking Control Law, and in other regulations and instructions that SAMA may have issued. It is also necessary to ensure that suitable measures are implemented to protect customer data and financial information in the course of performance of the outsourced services. These measures can include, for example, obligations requiring the adoption of isolation procedures restricting access to such information on a need-to-know basis, and obligations to have individuals involved in delivery of such services enter non-disclosure agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Contracts for basic works need to make clear that SAMA has the right to obtain accounting documents and records relating to the assignment. Additionally, service providers located outside the Kingdom need to confirm that there are no statutory and control restrictions in their own jurisdictions that might impact on the unrestricted right of access to information that SAMA has under the Outsourcing Rules and the Banking Control Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing contracts need to provide for the possibility of renewal, renegotiation, and termination of the contract, and early exit so that the bank can retain control over the subject services if it is necessary in the circumstances.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Business continuity</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing has the potential to cause interruptions or outages to banking services. Business continuity is very important for banks, particularly in terms of continuity of information technology services. The Outsourcing Rules require banks to have a plan in place to ensure business continuity if the outsourced service is disrupted. This can either be a plan for the bank to perform the function itself, or to have an alternate service provider ready to undertake the services on short notice. The Outsourcing Rules place an obligation on banks to inform SAMA of problems or disruptions that arise due to outsourcing arrangements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In line with SAMA’s Business Continuity Management Framework (issued in 2017), banks need to have a business continuity strategy, and a business line responsible for implementing, monitoring and evaluating the strategy. An information technology disaster recovery plan is required as a key component of business continuity; it applies whether or not information technology services are outsourced. The Business Continuity Management Framework outlines how to develop and implement a business continuity strategy in more detail.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cyber security considerations</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The SAMA Cyber Security Framework (issued in 2017, and discussed in a <a href=\"https://www.tamimi.com/law-update-articles/cyber-security-in-the-saudi-financial-services-sector-the-sama-cyber-security-framework/\">separate Law Update article</a>) acknowledges that banks will need to engage with third party service providers (including information technology services providers, cloud computing service providers, technology vendors and governmental agencies) in order to deliver their services. If such engagements do not respect the types of cyber security mechanisms that the banks have implemented, then they could result in cyber security risks. With this in mind, the Cyber Security Framework introduces expectations with regard to cyber security and the engagement of third parties. These can be broadly categorised as contract and vendor management considerations, outsourcing considerations and cloud computing considerations. It is essential that the cyber security obligations applying to banks pursuant to their implementation of SAMA’s Cyber Security Framework are addressed when considering outsourcing arrangements, and when preparing associated outsourcing contracts.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Banks operating in Saudi Arabia need to be aware of the Outsourcing Rules. This is to ensure that they remain compliant from a regulatory perspective, but also to ensure that the outsourcing of certain business operations does not result in damage to their customers, or to their own operation, reputations and profitability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The risks are greater when banks outsource their core functions, and SAMA’s Outsourcing Rules imposes greater obligations and restrictions on that type of outsourcing as a result.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/technology-media-telecommunications/\">Technology, Media &amp; Telecommunications</a> team regularly advises on issues relating to technology contracting in the financial services sector. For further information please contact <a href=\"https://www.tamimi.com/lawyer/nick-oconnell/\">Nick O’Connell</a>, Partner (<a href=\"mailto:n.oconnell@tamimi.com\">n.oconnell@tamimi.com</a>) or <a href=\"https://www.tamimi.com/lawyer/amy-land-pejoska/\">Amy Land-Pejoska</a>, Associate (<a href=\"mailto:a.pejoska@tamimi.com\">a.pejoska@tamimi.com</a>).</em>');
INSERT INTO `tm_wsal_metadata` (`id`, `occurrence_id`, `name`, `value`) VALUES
(309983, 29553, 'MetaValueOld', '<p dir=\"LTR\" align=\"LEFT\">There have been significant changes in technology and regulation since 2008, when the Saudi Arabian Monetary Authority (SAMA) issued Circular No. 424 B.C.S / 34720 – the SAMA Rules of Outsourcing Processes. In this article, we summarise key aspects of the \"Outsourcing Rules\" with a focus on the outsourcing of information technology services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing is a business practice in which a business engages external service providers to perform certain business functions, instead of having those functions performed by its own personnel. The increasing complexity of the outsourcing arrangements adopted by banks, and the potential harm to consumers from offshoring arrangements out of reach of regulators, led to a 2005 report by the Basel Committee on Banking Supervision. The report contained recommendations about tightening the way in which banks outsourced their activities. SAMA subsequently issued the Outsourcing Rules in 2008.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The stated objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences. The Outsourcing Rules apply to branches of foreign banks in the Kingdom, as well as to domestic banks licensed under the Banking Control Law issued under Royal Decree No. M/5 dated 22/2/1386H (12 June 1966).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Engaging third party service providers can enable banks to reduce costs and obtain other efficiencies, but it may also expose banks to a variety of risks. These can include operational and reputational risks, such as when service providers fail in their performance, when security or confidentiality breaches result, or where the service providers’ actions otherwise result in banks failing to comply with statutory or regulatory obligations. Additionally, the whole banking sector could be at risk if a common service provider to a number of banks fails in its performance of the services entrusted to it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing basic work and non-basic work</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules split those functions and tasks that can be outsourced into two main categories – ‘basic works’ and ‘non-basic works’. There are different considerations for outsourcing each of these categories of works, and there is a general prohibition (with some exceptions) on the outsourcing of works relating to customer data processing.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Basic works refer broadly to the core tasks and responsibilities that banks have towards their customers. The operation of a bank’s information technology system is a prime example of basic works. Other examples include all customer-facing tasks (e.g. account opening, funds management, bank statements and transfers and payments), as well as human resources and marketing.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks are required to apply more rigour and diligence when outsourcing basic works, given the more serious consequences if the arrangement results in non-delivery of services. For that reason, the outsourcing of basic works is generally not permitted, unless the bank first obtains permission from SAMA. The Outsourcing Rules contain detailed requirements about what must be addressed in outsourcing contracts for basic works, and these are primarily aimed at reducing the potential harm that could result from outsourcing these core tasks and responsibilities.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignright wp-image-8222\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/11.jpg\" alt=\"\" width=\"443\" height=\"309\" />Non-basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In contrast, non-basic works include services that are common to many businesses, and where outsourcing does not pose serious risk to customers. Examples include cleaning, printing and postal functions. Non-basic works may be assigned to third party service providers without first obtaining confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Traditionally, banks would assign many non-basic works to third party service providers as a matter of course, and this may not have been considered ‘outsourcing’. Despite this, there may be implications for the outsourcing of such works in the Outsourcing Rules, so agreements relating to such works still need to be reviewed for compliance.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences.\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Risk evaluation and management</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require senior management within banks to ensure that risks for existing and potential outsourcing agreements are considered and addressed. For the assignment of basic works, a thorough risk evaluation needs to be undertaken for all new contracts and contract renewals. For non-basic works, a thorough review is only required where there are substantive changes to the deliverables under an outsourcing arrangement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks must properly investigate a service provider’s ability to undertake the contemplated services. Once a service provider is appointed, there is an obligation on the bank to monitor the service provider’s performance to ensure that the work is being done in accordance with the bank’s requirements.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing contracts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require banks to put in place comprehensive outsourcing contracts with service providers. These contracts need to address a variety of requirements, including scope of work, service levels and performance requirements, control and audit procedures, business continuity, pricing, confidentiality and privacy, information security, effects of breach and dispute resolution. The Outsourcing Rules indicate that it is preferable for governing law and jurisdiction of outsourcing contracts be that of Saudi Arabia.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There is a requirement for outsourcing contracts to restrict service providers from sub-contracting any of the subject services without the prior consent of the banks, and subject to obtaining prior confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where customer data or financial statements are to be made available to a service provider in performance of outsourced services, it is necessary to ensure that the contractual arrangement reflects the confidentiality obligations set out in the Banking Control Law, and in other regulations and instructions that SAMA may have issued. It is also necessary to ensure that suitable measures are implemented to protect customer data and financial information in the course of performance of the outsourced services. These measures can include, for example, obligations requiring the adoption of isolation procedures restricting access to such information on a need-to-know basis, and obligations to have individuals involved in delivery of such services enter non-disclosure agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Contracts for basic works need to make clear that SAMA has the right to obtain accounting documents and records relating to the assignment. Additionally, service providers located outside the Kingdom need to confirm that there are no statutory and control restrictions in their own jurisdictions that might impact on the unrestricted right of access to information that SAMA has under the Outsourcing Rules and the Banking Control Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing contracts need to provide for the possibility of renewal, renegotiation, and termination of the contract, and early exit so that the bank can retain control over the subject services if it is necessary in the circumstances.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Business continuity</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing has the potential to cause interruptions or outages to banking services. Business continuity is very important for banks, particularly in terms of continuity of information technology services. The Outsourcing Rules require banks to have a plan in place to ensure business continuity if the outsourced service is disrupted. This can either be a plan for the bank to perform the function itself, or to have an alternate service provider ready to undertake the services on short notice. The Outsourcing Rules place an obligation on banks to inform SAMA of problems or disruptions that arise due to outsourcing arrangements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In line with SAMA’s Business Continuity Management Framework (issued in 2017), banks need to have a business continuity strategy, and a business line responsible for implementing, monitoring and evaluating the strategy. An information technology disaster recovery plan is required as a key component of business continuity; it applies whether or not information technology services are outsourced. The Business Continuity Management Framework outlines how to develop and implement a business continuity strategy in more detail.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cyber security considerations</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The SAMA Cyber Security Framework (issued in 2017, and discussed in a <a href=\"https://www.tamimi.com/law-update-articles/cyber-security-in-the-saudi-financial-services-sector-the-sama-cyber-security-framework/\">separate Law Update article</a>) acknowledges that banks will need to engage with third party service providers (including information technology services providers, cloud computing service providers, technology vendors and governmental agencies) in order to deliver their services. If such engagements do not respect the types of cyber security mechanisms that the banks have implemented, then they could result in cyber security risks. With this in mind, the Cyber Security Framework introduces expectations with regard to cyber security and the engagement of third parties. These can be broadly categorised as contract and vendor management considerations, outsourcing considerations and cloud computing considerations. It is essential that the cyber security obligations applying to banks pursuant to their implementation of SAMA’s Cyber Security Framework are addressed when considering outsourcing arrangements, and when preparing associated outsourcing contracts.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Banks operating in Saudi Arabia need to be aware of the Outsourcing Rules. This is to ensure that they remain compliant from a regulatory perspective, but also to ensure that the outsourcing of certain business operations does not result in damage to their customers, or to their own operation, reputations and profitability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The risks are greater when banks outsource their core functions, and SAMA’s Outsourcing Rules imposes greater obligations and restrictions on that type of outsourcing as a result.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/technology-media-telecommunications/\">Technology, Media &amp; Telecommunications</a> team regularly advises on issues relating to technology contracting in the financial services sector. For further information please contact <a href=\"https://www.tamimi.com/lawyer/nick-oconnell/\">Nick O’Connell</a>, Partner (<a href=\"mailto:n.oconnell@tamimi.com\">n.oconnell@tamimi.com</a>) or <a href=\"https://www.tamimi.com/lawyer/amy-land-pejoska/\">Amy Land-Pejoska</a>, Associate (<a href=\"mailto:a.pejoska@tamimi.com\">a.pejoska@tamimi.com</a>).</em>'),
(309984, 29553, 'MetaLink', 'content'),
(309985, 29553, 'EditorLinkPost', 'https://www.tamimi.com/wp-admin/post.php?post=8206&amp;action=edit'),
(309986, 29553, 'ReportText', '<p dir=\"LTR\" align=\"LEFT\">There have been significant changes in technology and regulation since 2008, when the Saudi Arabian Monetary Authority (SAMA) issued Circular No. 424 B.C.S / 34720 – the SAMA Rules of Outsourcing Processes. In this article, we summarise key aspects of the \"Outsourcing Rules\" with a focus on the outsourcing of information technology services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing is a business practice in which a business engages external service providers to perform certain business functions, instead of having those functions performed by its own personnel. The increasing complexity of the outsourcing arrangements adopted by banks, and the potential harm to consumers from offshoring arrangements out of reach of regulators, led to a 2005 report by the Basel Committee on Banking Supervision. The report contained recommendations about tightening the way in which banks outsourced their activities. SAMA subsequently issued the Outsourcing Rules in 2008.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The stated objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences. The Outsourcing Rules apply to branches of foreign banks in the Kingdom, as well as to domestic banks licensed under the Banking Control Law issued under Royal Decree No. M/5 dated 22/2/1386H (12 June 1966).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Engaging third party service providers can enable banks to reduce costs and obtain other efficiencies, but it may also expose banks to a variety of risks. These can include operational and reputational risks, such as when service providers fail in their performance, when security or confidentiality breaches result, or where the service providers’ actions otherwise result in banks failing to comply with statutory or regulatory obligations. Additionally, the whole banking sector could be at risk if a common service provider to a number of banks fails in its performance of the services entrusted to it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing basic work and non-basic work</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules split those functions and tasks that can be outsourced into two main categories – ‘basic works’ and ‘non-basic works’. There are different considerations for outsourcing each of these categories of works, and there is a general prohibition (with some exceptions) on the outsourcing of works relating to customer data processing.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Basic works refer broadly to the core tasks and responsibilities that banks have towards their customers. The operation of a bank’s information technology system is a prime example of basic works. Other examples include all customer-facing tasks (e.g. account opening, funds management, bank statements and transfers and payments), as well as human resources and marketing.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks are required to apply more rigour and diligence when outsourcing basic works, given the more serious consequences if the arrangement results in non-delivery of services. For that reason, the outsourcing of basic works is generally not permitted, unless the bank first obtains permission from SAMA. The Outsourcing Rules contain detailed requirements about what must be addressed in outsourcing contracts for basic works, and these are primarily aimed at reducing the potential harm that could result from outsourcing these core tasks and responsibilities.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignright wp-image-8222\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/11.jpg\" alt=\"\" width=\"443\" height=\"309\" />Non-basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In contrast, non-basic works include services that are common to many businesses, and where outsourcing does not pose serious risk to customers. Examples include cleaning, printing and postal functions. Non-basic works may be assigned to third party service providers without first obtaining confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Traditionally, banks would assign many non-basic works to third party service providers as a matter of course, and this may not have been considered ‘outsourcing’. Despite this, there may be implications for the outsourcing of such works in the Outsourcing Rules, so agreements relating to such works still need to be reviewed for compliance.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences.\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Risk evaluation and management</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require senior management within banks to ensure that risks for existing and potential outsourcing agreements are considered and addressed. For the assignment of basic works, a thorough risk evaluation needs to be undertaken for all new contracts and contract renewals. For non-basic works, a thorough review is only required where there are substantive changes to the deliverables under an outsourcing arrangement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks must properly investigate a service provider’s ability to undertake the contemplated services. Once a service provider is appointed, there is an obligation on the bank to monitor the service provider’s performance to ensure that the work is being done in accordance with the bank’s requirements.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing contracts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require banks to put in place comprehensive outsourcing contracts with service providers. These contracts need to address a variety of requirements, including scope of work, service levels and performance requirements, control and audit procedures, business continuity, pricing, confidentiality and privacy, information security, effects of breach and dispute resolution. The Outsourcing Rules indicate that it is preferable for governing law and jurisdiction of outsourcing contracts be that of Saudi Arabia.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There is a requirement for outsourcing contracts to restrict service providers from sub-contracting any of the subject services without the prior consent of the banks, and subject to obtaining prior confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where customer data or financial statements are to be made available to a service provider in performance of outsourced services, it is necessary to ensure that the contractual arrangement reflects the confidentiality obligations set out in the Banking Control Law, and in other regulations and instructions that SAMA may have issued. It is also necessary to ensure that suitable measures are implemented to protect customer data and financial information in the course of performance of the outsourced services. These measures can include, for example, obligations requiring the adoption of isolation procedures restricting access to such information on a need-to-know basis, and obligations to have individuals involved in delivery of such services enter non-disclosure agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Contracts for basic works need to make clear that SAMA has the right to obtain accounting documents and records relating to the assignment. Additionally, service providers located outside the Kingdom need to confirm that there are no statutory and control restrictions in their own jurisdictions that might impact on the unrestricted right of access to information that SAMA has under the Outsourcing Rules and the Banking Control Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing contracts need to provide for the possibility of renewal, renegotiation, and termination of the contract, and early exit so that the bank can retain control over the subject services if it is necessary in the circumstances.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Business continuity</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing has the potential to cause interruptions or outages to banking services. Business continuity is very important for banks, particularly in terms of continuity of information technology services. The Outsourcing Rules require banks to have a plan in place to ensure business continuity if the outsourced service is disrupted. This can either be a plan for the bank to perform the function itself, or to have an alternate service provider ready to undertake the services on short notice. The Outsourcing Rules place an obligation on banks to inform SAMA of problems or disruptions that arise due to outsourcing arrangements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In line with SAMA’s Business Continuity Management Framework (issued in 2017), banks need to have a business continuity strategy, and a business line responsible for implementing, monitoring and evaluating the strategy. An information technology disaster recovery plan is required as a key component of business continuity; it applies whether or not information technology services are outsourced. The Business Continuity Management Framework outlines how to develop and implement a business continuity strategy in more detail.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cyber security considerations</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The SAMA Cyber Security Framework (issued in 2017, and discussed in a <a href=\"https://www.tamimi.com/law-update-articles/cyber-security-in-the-saudi-financial-services-sector-the-sama-cyber-security-framework/\">separate Law Update article</a>) acknowledges that banks will need to engage with third party service providers (including information technology services providers, cloud computing service providers, technology vendors and governmental agencies) in order to deliver their services. If such engagements do not respect the types of cyber security mechanisms that the banks have implemented, then they could result in cyber security risks. With this in mind, the Cyber Security Framework introduces expectations with regard to cyber security and the engagement of third parties. These can be broadly categorised as contract and vendor management considerations, outsourcing considerations and cloud computing considerations. It is essential that the cyber security obligations applying to banks pursuant to their implementation of SAMA’s Cyber Security Framework are addressed when considering outsourcing arrangements, and when preparing associated outsourcing contracts.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Banks operating in Saudi Arabia need to be aware of the Outsourcing Rules. This is to ensure that they remain compliant from a regulatory perspective, but also to ensure that the outsourcing of certain business operations does not result in damage to their customers, or to their own operation, reputations and profitability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The risks are greater when banks outsource their core functions, and SAMA’s Outsourcing Rules imposes greater obligations and restrictions on that type of outsourcing as a result.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/technology-media-telecommunications/\">Technology, Media &amp; Telecommunications</a> team regularly advises on issues relating to technology contracting in the financial services sector. For further information please contact <a href=\"https://www.tamimi.com/lawyer/nick-oconnell/\">Nick O’Connell</a>, Partner (<a href=\"mailto:n.oconnell@tamimi.com\">n.oconnell@tamimi.com</a>) or <a href=\"https://www.tamimi.com/lawyer/amy-land-pejoska/\">Amy Land-Pejoska</a>, Associate (<a href=\"mailto:a.pejoska@tamimi.com\">a.pejoska@tamimi.com</a>).</em>|<img src=\"https://www.tamimi.com/wp-content/uploads/2018/09/shutterstock_632368769.jpg\" alt=\"\" width=\"1000\" height=\"315\" class=\"aligncenter size-full wp-image-8274\" />&nbsp;\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">There have been significant changes in technology and regulation since 2008, when the Saudi Arabian Monetary Authority (SAMA) issued Circular No. 424 B.C.S / 34720 – the SAMA Rules of Outsourcing Processes. In this article, we summarise key aspects of the \"Outsourcing Rules\" with a focus on the outsourcing of information technology services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing is a business practice in which a business engages external service providers to perform certain business functions, instead of having those functions performed by its own personnel. The increasing complexity of the outsourcing arrangements adopted by banks, and the potential harm to consumers from offshoring arrangements out of reach of regulators, led to a 2005 report by the Basel Committee on Banking Supervision. The report contained recommendations about tightening the way in which banks outsourced their activities. SAMA subsequently issued the Outsourcing Rules in 2008.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The stated objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences. The Outsourcing Rules apply to branches of foreign banks in the Kingdom, as well as to domestic banks licensed under the Banking Control Law issued under Royal Decree No. M/5 dated 22/2/1386H (12 June 1966).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Engaging third party service providers can enable banks to reduce costs and obtain other efficiencies, but it may also expose banks to a variety of risks. These can include operational and reputational risks, such as when service providers fail in their performance, when security or confidentiality breaches result, or where the service providers’ actions otherwise result in banks failing to comply with statutory or regulatory obligations. Additionally, the whole banking sector could be at risk if a common service provider to a number of banks fails in its performance of the services entrusted to it.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing basic work and non-basic work</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules split those functions and tasks that can be outsourced into two main categories – ‘basic works’ and ‘non-basic works’. There are different considerations for outsourcing each of these categories of works, and there is a general prohibition (with some exceptions) on the outsourcing of works relating to customer data processing.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Basic works refer broadly to the core tasks and responsibilities that banks have towards their customers. The operation of a bank’s information technology system is a prime example of basic works. Other examples include all customer-facing tasks (e.g. account opening, funds management, bank statements and transfers and payments), as well as human resources and marketing.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks are required to apply more rigour and diligence when outsourcing basic works, given the more serious consequences if the arrangement results in non-delivery of services. For that reason, the outsourcing of basic works is generally not permitted, unless the bank first obtains permission from SAMA. The Outsourcing Rules contain detailed requirements about what must be addressed in outsourcing contracts for basic works, and these are primarily aimed at reducing the potential harm that could result from outsourcing these core tasks and responsibilities.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignright wp-image-8222\" src=\"https://www.tamimi.com/wp-content/uploads/2018/09/11.jpg\" alt=\"\" width=\"443\" height=\"309\" />Non-basic Works</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In contrast, non-basic works include services that are common to many businesses, and where outsourcing does not pose serious risk to customers. Examples include cleaning, printing and postal functions. Non-basic works may be assigned to third party service providers without first obtaining confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Traditionally, banks would assign many non-basic works to third party service providers as a matter of course, and this may not have been considered ‘outsourcing’. Despite this, there may be implications for the outsourcing of such works in the Outsourcing Rules, so agreements relating to such works still need to be reviewed for compliance.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"The objective of the Outsourcing Rules is to provide guidance to banks on how to arrange outsourcing, while remaining compliant with the obligations under their banking licences.\"</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Risk evaluation and management</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require senior management within banks to ensure that risks for existing and potential outsourcing agreements are considered and addressed. For the assignment of basic works, a thorough risk evaluation needs to be undertaken for all new contracts and contract renewals. For non-basic works, a thorough review is only required where there are substantive changes to the deliverables under an outsourcing arrangement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Banks must properly investigate a service provider’s ability to undertake the contemplated services. Once a service provider is appointed, there is an obligation on the bank to monitor the service provider’s performance to ensure that the work is being done in accordance with the bank’s requirements.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Outsourcing contracts</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Outsourcing Rules require banks to put in place comprehensive outsourcing contracts with service providers. These contracts need to address a variety of requirements, including scope of work, service levels and performance requirements, control and audit procedures, business continuity, pricing, confidentiality and privacy, information security, effects of breach and dispute resolution. The Outsourcing Rules indicate that it is preferable for governing law and jurisdiction of outsourcing contracts be that of Saudi Arabia.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There is a requirement for outsourcing contracts to restrict service providers from sub-contracting any of the subject services without the prior consent of the banks, and subject to obtaining prior confirmation of no objection from SAMA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Where customer data or financial statements are to be made available to a service provider in performance of outsourced services, it is necessary to ensure that the contractual arrangement reflects the confidentiality obligations set out in the Banking Control Law, and in other regulations and instructions that SAMA may have issued. It is also necessary to ensure that suitable measures are implemented to protect customer data and financial information in the course of performance of the outsourced services. These measures can include, for example, obligations requiring the adoption of isolation procedures restricting access to such information on a need-to-know basis, and obligations to have individuals involved in delivery of such services enter non-disclosure agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Contracts for basic works need to make clear that SAMA has the right to obtain accounting documents and records relating to the assignment. Additionally, service providers located outside the Kingdom need to confirm that there are no statutory and control restrictions in their own jurisdictions that might impact on the unrestricted right of access to information that SAMA has under the Outsourcing Rules and the Banking Control Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing contracts need to provide for the possibility of renewal, renegotiation, and termination of the contract, and early exit so that the bank can retain control over the subject services if it is necessary in the circumstances.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Business continuity</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Outsourcing has the potential to cause interruptions or outages to banking services. Business continuity is very important for banks, particularly in terms of continuity of information technology services. The Outsourcing Rules require banks to have a plan in place to ensure business continuity if the outsourced service is disrupted. This can either be a plan for the bank to perform the function itself, or to have an alternate service provider ready to undertake the services on short notice. The Outsourcing Rules place an obligation on banks to inform SAMA of problems or disruptions that arise due to outsourcing arrangements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In line with SAMA’s Business Continuity Management Framework (issued in 2017), banks need to have a business continuity strategy, and a business line responsible for implementing, monitoring and evaluating the strategy. An information technology disaster recovery plan is required as a key component of business continuity; it applies whether or not information technology services are outsourced. The Business Continuity Management Framework outlines how to develop and implement a business continuity strategy in more detail.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Cyber security considerations</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The SAMA Cyber Security Framework (issued in 2017, and discussed in a <a href=\"https://www.tamimi.com/law-update-articles/cyber-security-in-the-saudi-financial-services-sector-the-sama-cyber-security-framework/\">separate Law Update article</a>) acknowledges that banks will need to engage with third party service providers (including information technology services providers, cloud computing service providers, technology vendors and governmental agencies) in order to deliver their services. If such engagements do not respect the types of cyber security mechanisms that the banks have implemented, then they could result in cyber security risks. With this in mind, the Cyber Security Framework introduces expectations with regard to cyber security and the engagement of third parties. These can be broadly categorised as contract and vendor management considerations, outsourcing considerations and cloud computing considerations. It is essential that the cyber security obligations applying to banks pursuant to their implementation of SAMA’s Cyber Security Framework are addressed when considering outsourcing arrangements, and when preparing associated outsourcing contracts.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Banks operating in Saudi Arabia need to be aware of the Outsourcing Rules. This is to ensure that they remain compliant from a regulatory perspective, but also to ensure that the outsourcing of certain business operations does not result in damage to their customers, or to their own operation, reputations and profitability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The risks are greater when banks outsource their core functions, and SAMA’s Outsourcing Rules imposes greater obligations and restrictions on that type of outsourcing as a result.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"https://www.tamimi.com/practice/technology-media-telecommunications/\">Technology, Media &amp; Telecommunications</a> team regularly advises on issues relating to technology contracting in the financial services sector. For further information please contact <a href=\"https://www.tamimi.com/lawyer/nick-oconnell/\">Nick O’Connell</a>, Partner (<a href=\"mailto:n.oconnell@tamimi.com\">n.oconnell@tamimi.com</a>) or <a href=\"https://www.tamimi.com/lawyer/amy-land-pejoska/\">Amy Land-Pejoska</a>, Associate (<a href=\"mailto:a.pejoska@tamimi.com\">a.pejoska@tamimi.com</a>).</em>'),
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