New pricing mechanism established

Dubai's Department of Finance organised a workshop for the bodies and institutions of the government, which has triggered the application of a standard mechanism for the governmental services pricing from which to determine the amounts and rates of fees and the price and tariffs charged by the government in return for its services.

Nasser bin Hassan Al Shaikh, General Director of Department of Finance, said the new pricing mechanism was established according to the best scientific principles and standards.

"By applying this mechanism there will be a lot more credibility in determining the value of fees and tariffs and prices of services away from speculation, based on mood or the desire to increase revenue. Since the mechanism is based on principles and foundations, it considers the social dimensions of providing services for a fee available to everyone, including those with limited income, and economic dimensions, which is the reduction of waste in resources and economic efficiency in the use of public funds," he said.

He said the mechanism identifies the approved methods of pricing three types of services. The first type is the administrative services such as licensing and regulatory permits and transactions, civil status, and other services. The fees are determined on the basis of fair cost and benefit.

He said the fair cost of service is the administrative cost that may be chargeable to anyone who claimed the service to the exclusion of any costs incurred by the government and may not be chargeable to the client, such as high salaries, valuable equipment, which means that what has been calculated is the real cost.

Al Shaikh said the new pricing mechanism has sufficient flexibility to accommodate all cases, which means that the government will seek to increase the level of cost efficiency to reach the current level of fair cost.

With regards to the benefits account that has been based on special benefit related to the ability of the beneficiary to use the service, regardless the great benefits that may be achieved as a result of that.

The second type is the economic competitiveness of services provided by the government and the private sector that are priced on the basis of market prices and fair competition in terms of service quality and speed of delivery and commitment to the market price, even if the cost of the provided service is higher than the price fixed, an example of this type is the medical services provided by Health Authority, with the possibility that the government may support some of these services for free of charge or in cases that require it.

The third type manifests itself; it is the non-economic services either provided by one authority which could be the government or a private sector, such as electricity, water and public transport services and sanitation. In this case tariffs are determined on the basis of economic cost by the global standards for each sector, with the possibility that the government may offer support in immediate purposes. Al Shaikh said the new pricing mechanism has sufficient flexibility to accommodate all cases, and be compatible with different economic circumstances

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