Gov’t drafts fund law to govern investments in mega projects

AMMAN — The Cabinet on Wednesday approved the draft investment fund law for 2016 and referred it to the Lower House, the Jordan News Agency, Petra, reported. 

Under the bill, an investment fund will be established to provide funding resources for large-scale infrastructure and development projects that benefit national economy. 

The bill allows sovereign funds and Arab and foreign investment institutions to invest in a set of projects specified in the provisions of the law. 

Under the draft law, a fund named "Jordan Investment Fund" is to be established as a legal person of financial and administrative independence, thus able to possess movable and immovable assets and conduct all necessary legal measures to achieve its goals.

The fund's headquarters will be located in Amman and can, by decision of its board of directors, open offices inside and outside the Kingdom.

The draft law stipulates that the fund has the right to possess, invest and develop the following projects: the national railway network, the electricity interconnectivity project with Saudi Arabia, the pipeline to transfer crude oil and fuel derivatives to the Jordan Petroleum Refinery Company ,and consumption and storage points. 

Moreover, the bill includes the infrastructure development in the Custodian of the Two Holy Shrines City project and a recreational estate project in Matal.

Under article 6 of the draft law, the fund can invest in other projects that the Cabinet approves, based on a recommendation from the board of directors, but the approval must heed the rulings of Article 6 Paragraph A, which says the fund has the right to contribute in any economic activity within the sectors of energy and mineral resources, transportation, water and infrastructure under a Cabinet decision.

The paragraph also stipulates that the fund’s board of directors is to be headed by the prime minister and its members including the ministers of planning and international cooperation, finance, energy and industry, trade and supply, in addition to three members chosen by the Council of Ministers. 

Article 8, Paragraph A stipulates that sovereign funds and Arab and foreign investment institutions are to establish a shareholding company or more to invest in development rights and in projects listed in the bill.

Paragraph B says that despite what is mentioned in the companies and securities or any other law, the company is established under special provisions that organise its work under a by-law issued by the Cabinet for the purpose, in addition to having the right to offer its shares for subscription at the bourse.

The draft law regulates the relationship between the company and the fund under investment contracts, which will not include a pledge from the government to guarantee the amount of invested money or a set percentage of revenues. 

The company is also allowed to invest in projects outside the ones in the draft law but then cannot enjoy the incentives and privileges associated with the listed projects. 

Under the bill, the fund can delegate powers to a company or several companies affiliated with it to own, manage and operate projects for the duration it sees fit .

The fund can also transfer its shareholding rights in any economic activity in the sectors of energy, mineral resources, transportation, water and infrastructure. 

When a contract for development and investment ends for any projects, all the assets of that project are devolved to the fund for no return. 

Article 11, Paragraph A of the draft investment fund law stipulates that the fund and the company are exempted from all customs and stamps fees and any other fees or taxes, including general sales tax, special taxes and the income tax. 

Despite any other law, the draft law stipulates that the Cabinet forms a technical committee with the task of providing different licences, permits and work permits to execute the projects and operate them, and its decision after being approved by the prime minister becomes binding to all the concerned parties. 

If a project requires the fund or the company to possess a real estate, and the owner of the estate refuses to sell it or any part of it for a fair price, the fund or the company can ask the board of directors to obtain an acquisition order from the Council of Ministers, considering the project is meant for the public interest.

Finance Minister Omar Malhas stressed the importance of the draft law, which the government started preparing several months ago, noting that the bill would open the door for Gulf citizens to invest in Jordan’s main infrastructure projects, Petra reported.