The Ministry of Municipalities and Housing has proposed a project to update the controls for establishing companies owned by secretariats and municipalities, aiming to develop the regulatory framework governing the establishment of secretariat companies and the assignment of municipal works to them, thereby enhancing governance and oversight, improving operational and investment efficiency, while ensuring fair competition with the private sector is not compromised.

The ministry explained that the update project, which it put forward via the 'Istitlaa' platform for public consultation before its approval, aims to enable secretariats and municipalities to use their companies as developmental and investment arms, and to regulate establishment procedures, requirements for detailed studies, assignment mechanisms, financing, asset and revenue investment, in addition to enhancing disclosure, compliance, and oversight.

5 Objectives for Secretariat Companies: The project specified the objectives of secretariat companies as: land development and urban rehabilitation, improving the quality of urban landscape and municipal services, infrastructure development and waste management, supporting licensing and oversight, stimulating private sector participation, and maximizing returns, revenue development, and sustainable financing.

Establishment Controls: The controls require preparing a detailed study before establishing any company, including the targeted works, funding sources, capital, and private sector participation plans. Establishment applications are to be submitted to the ministry, and the minister decides on approval.

The controls also allow establishing secretariat companies as joint-stock companies, simplified joint-stock companies, or limited liability companies, with the possibility of transferring some municipal properties to them, or establishing subsidiaries or joint ventures with government entities or the private sector in accordance with relevant regulations.

Scope of Competencies: The project affirmed that the principle for municipal works with investment returns is their execution by the private sector, while allowing secretariat companies to manage them according to specific controls, and prohibiting secretariat companies from executing any municipal works that yield investment returns and that can be efficiently executed by the private sector.

Meanwhile, it permitted assigning some capital works to secretariat companies after completing feasibility studies and securing necessary financial appropriations, in addition to setting technical conditions and specifications for the services and works being assigned, and assessing major risks and their distribution mechanism between the secretariat and the company. Secretariat companies are not allowed to subcontract any capital works without prior written approval from the relevant secretariat.

Investment of Secretariat Companies' Properties: The controls regulated mechanisms for investing the movable properties of secretariat companies through partnerships with the private sector, and specified controls for revenues and financial consideration, while prohibiting the imposition of any additional fees on beneficiaries as a result of executing any municipal works assigned by secretariats, unless regulations stipulate otherwise.

The project emphasized the commitment of secretariat companies to the highest standards of governance, transparency, and disclosure, and their subjection to government oversight, while prohibiting granting them any unfair competitive advantages compared to private sector companies, or using secretariat powers in a way that restricts competition.

The project also included transitional provisions allowing existing companies to continue their current operations and contracts, while obliging them to align their status and regulatory documents with the new controls within a period specified by the Minister of Municipalities and Housing.