王辉

The PPP， corporation mode ventured by government and social capital， which comes from “Public Private Partnership” financing mechanism， is based on the project. PPP is primarily applicable to the government-responded and market-oriented field in public and infrastructural service.

PPP is the main goal to be achieved for governmental reform in this new normal of China economy. The government plans to establish the long-standing cooperation with the social capital in principle of the share of the gain and loss to enhance the capacity of supplying public goods and services by means of franchising， purchase service and equity cooperation.PPP is domestically the key to the mixed-ownership economy reform， and the approach to implement the “one belt and one road”abroad. No matter it is state-owned or individual-owned enterprise， they can implement the adjustment of development strategy through the historical opportunities presented by PPP.

Efficiency prior to mode

The common PPP projects include gas， electricity， water supply， heating， sewage and garbage disposal and other municipal facilities， roads， railways， airports， urban mass transit and other transport facilities， medical care， tourism， education， health care， pension insurance， as well as water conservancy， natural resources and eco environment protection.

Vigorously launched since 2014， PPP mode has been in research all the time. Since PPP was put into practice， state-owned enterprises have accounted for large market share， so it is thought that PPP is turned into Public-Public Partnerships in China. Over past 3 years， local governments launched many PPP projects， which cross the redline drawn by ministry of finance. The risks of“Funding bottleneck ”and “abuse of fund”are being questioned.

NDRC（National Development and Reform Commission） and Ministry of Finance have carried out PPP Mode in the field of conventional infrastructure construction and social services， which requires joined forces of legislation and policy being discussed constantly. The PPP Law tending to be subject to civil and commercial law is widely accepted. The role of project Supervisor for government shifted to the principal part of it shall be realized. Government and social capital are the equal parts， if any disputes， it shall be arbitrated according to the contract law and civil commercial law. Franchise Law belongs to the administration legal relationship， whose extent of application is limited. According to the Administration Legal Relationship， government is the first party of contract， who bears the duties of supervising in administration.endprint

Franchise is not the key to solve the low-efficiency problem of PPP mode. No matter in which legislation system， PPP mode will fail to be workable， before the realization of the higher motivation cost by private companies， the firm bundling of “building” and “operation” of projects， the transparency of information and competition for biding and the hard budget constraint set by local government.

The legislative affairs office of State Council has taken a lead to conduct the affair of PPP legislation.

There are some critical opinions about the change of Public-Private to Public- Public， which raise questions about whether the appearance of state-owned enterprise in PPP projects is against the intention of implementation of PPP. The simplest way of understanding it is that， no matter it is the “original PPP”or the“varied PPP”， the one which can supply qualified public goods and services under the Chinese Mechanism will be in efficiency. In the view of economic theories， the state-owned enterprises are obviously more efficient in motivating working staffs and supplying more demanded products and services compared with old platform companies. At present， the high efficiency and completed managing mechanism of state-owned enterprises participating PPP projects are well structuring the economy by eliminating the low-efficient platform companies in deprived areas. The mixed ownership consortiums initiated by the state-owned and individual-owned Enterprises， can realize the complementary advantages and high efficiency in operating PPP projects through venture capital and other varieties of cooperation mode.

PPP is not applicable to all the public products and services， but it is too early to confirm that the funding bottle neck in PPP projects has arisen. The generalized opinion from the UK， only 10% of public goods and services suitable for PPP， is not acceptable， although the concept of PPP came from the UK. The Chinese characterized PPP mode utterly different from PFI of the UK （one pattern of varied PPP modes） is a new varied mode incorporating the conventional mode and PFI mode together. The rate for public goods and services accounting for PPP project is irrational. The maximum reliable rate should be set out on the basis of local financial capacity and other related conditions.

Pilot project and compliance management advance together

Many specialists started to learn PPP since 2014， so the theories， practices， knowledge and talents reserve are lacking to promote PPP projects management precisely. Now in China， the contracted PPP projects have been continuously promoted in an all-round way.endprint

In the second half of 2016， the pace of signing PPP projects are being picked up remarkably. From January 2014 to March 2017， the contracts of PPP projects awarded for non-state-owned enterprises were more than 2500 with total investment of 4.2 trillion Yuan， the half of which were signed since July 2016. With the passing of adaption period， the practical operation in PPP projects is increasingly enhanced in all respects.

According to the reforming documents newly issued， establishing demonstration projects， securitizing PPP projects assets and training of practical operation are the prime plans to be fulfilled. Yan Pengcheng， the Director of Policy Research Department of NDRC， indicates that the innovation of PPP projects carried out in the field of municipal works and key areas in Liaoning province will be carried on. A number of high –quality projects must be completed to present the demonstration effects. Local governments weak performance in operating PPP projects practically requires intensified policy study and practical operation training. The PPP projects as demonstration and valuable reference need to be introduced soon for promoting PPP mode.

《the circular of advancing securitization of PPP projects asset in infrastructure》 was printing and issued by NDRC and CSRC ON 21st December of 2016. The securitization of PPP project assets requires above 2 years of normal operation of project and sustained cash flow.

The first 9 PPP projects have been short-listed for the asset securitization by NDRC. On 11th April of 2017， three of the projects were listed in the Shanghai stock exchange， which are the asset-backed special plan of charges and usufruct in sewage disposal PPP project by CITIC Securities and Beijing Capital Co.， Ltd， asset-backed special plan of charges and usufruct in new urbanization heating PPP project in Guan by CFLD and asset-backed special plan of charges and usufruct in Qingchun Road tunnel PPP project by CITIC Construction and Insigma Construction Investment Co.， Ltd. The securitization of PPP project assets is aiming to develop the financing channel and PPP projects underlying regularities， and supply diversified infrastructure assets to the market of Securities. The second package of securitized projects will be pick

《The guideline on Special Bond Issuance of PPP Projects》introduced by NDRC has determined the extent of application， the main focus， issuing conditions， requirements of auditing， information disclosure and capitalist information protection， which provide policy supports for the innovation financing systems and mechanisms， the development of financing systems and mechanisms， the guidance of social capitalized PPP projects， the increasing supply of public goods and services and the enterprises bond financing support for PPP projects.

《Provisional Rules of Administration of PPP Consultancy Organizations》issued on 1st of May by Ministry of Finance is directed against at the chaos of PPP intermediary markets. The open PPP information service and the effective combination of information demands and supplies which are enhanced by the database of third-party institutions promote regular and orderly development of PPP consultancy service market.

the PPP consultancy agents violating rules will be removed from organizations base， which is presented in 《Provisional Rules of Administration of PPP Consultancy Organizations》. Providing consultancy services to the governments and social-capitalized enterprises for one project at same time， incapable and obligation-unfulfilled organizations incurring serious faults and suspension of projects and the bad influences on public services incurred by the poor consultancy services in operation period are the three typical non-compliance managements.endprint