Abstract On the 12th of the Ministry of Finance website, the Ministry of Finance recently issued the "Notice on Deepening the Cooperation between Government and Social Capital in the Field of Public Service" (hereinafter referred to as "Notice"), clearly proposing to further promote PPP in the field of public services...
On the 12th of the Ministry of Finance website, the Ministry of Finance recently issued the "Notice on Deepening the Cooperation between Government and Social Capital in the Field of Public Service" (hereinafter referred to as the "Notice"), clearly proposing ideas for further promotion of PPP in the public service field, which will be further The large PPP model promotes the application and financial support, and proposes to apply the PPP model in new projects in the fields of waste treatment and sewage treatment. The notice said that the PPP model will be further promoted and applied. In the field of public services supported by the central government, two “compulsory†pilots can be explored based on industry characteristics and maturity. In the public service areas such as garbage disposal and sewage treatment, the project generally has cash flow, and the degree of marketization is relatively high. The PPP model is widely used and the operation is relatively mature. The new projects in various places must be “mandatory†to apply the PPP model, and the central government will gradually reduce and Cancel the special construction fund subsidy.
In addition, in other public service areas supported by the central government, for projects with cash flow and operating conditions, it is necessary to “force†the implementation of PPP pattern recognition and argumentation, encourage the use of PPP mode, focus on project operation, and improve the quality of public services.
The notice also proposed to actively guide the participation of various types of social capital. The financial departments at all levels should unite relevant departments to create a level playing field and encourage state-owned holding enterprises, private enterprises, mixed-ownership enterprises, foreign-invested enterprises and other types of enterprises to participate in PPP projects in accordance with the same standards and equal treatment. It is necessary to reasonably set procurement standards and conditions with relevant industry departments to ensure that the procurement process is fair, just and open, and may not use unreasonable procurement conditions (including excessively high or unrelated qualifications, excessive margins, etc.) for potential partners. Implement differential treatment or discriminatory treatment, and focus on stimulating and promoting private investment. For PPP projects that set differential and discriminatory provisions on private capital, the financial departments at all levels will no longer arrange funding and policy support.
At the same time as encouragement and guidance, the notice also further regulated the promotion of PPP. The notice clearly stated, “Ensure that public funds, assets and resources are used to improve the quality and level of public services, and determine social capital partners in accordance with the relevant provisions of the Government Procurement Law to effectively prevent inefficient investment and redundant construction.â€
The industry believes that the announcement will introduce the direction for the future PPP promotion in the public service sector in China, and it will help to further standardize the operation of PPP and effectively guide the private investment.
About "PPP Mode"
The PPP mode is the abbreviation of Public-Private-Partnership, which means that a partnership between the government and the private organization is based on a franchise agreement to provide certain public goods and services. By signing the contract to clarify the rights and obligations of both parties, to ensure the smooth completion of the cooperation, and ultimately to achieve more favorable results than the expected separate actions.
The public-private partnership model (PPP) has received extensive attention at home and abroad with its government's participation in the whole process of operation. The PPP model transfers part of the government's responsibility to the social entity (enterprise) in the form of franchise. The government and the social entity establish a community relationship of “interest sharing, risk sharing, and full cooperationâ€. The government's financial burden is reduced and the social entity's investment is reduced. The risk is reduced. The PPP model is more suitable for waste treatment or a part of it, such as hazardous waste treatment and domestic waste incineration treatment and landfill disposal. This model requires a reasonable choice of cooperation projects and consideration of the form, procedures, channels, scope and extent of government participation. This is a problem that is worth exploring and confusing.
As of the end of November 2015, among the first batch of 1043 PPP projects publicly promoted by the National Development and Reform Commission, 329 projects have been signed, accounting for 31.5% of the number of projects promoted.
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