China to regulate, implement new PPP mechanism

The State Council approved and forwarded a guideline on Nov 8 to regulate the new mechanism of public-private partnerships (PPP), jointly issued by the National Development and Reform Commission, and the Ministry of Finance.

According to the guideline, PPP projects should focus on user-paid projects, clarify the channels and methods of payment. Meanwhile, the operational revenue of PPP projects should cover construction investment and operational costs with some investment returns.

All PPP projects should adopt franchising format with defined asset ownerships in both construction and operation stages and clear rights, responsibilities and interests of all parties by contract.

Projects in transportation, municipal administration, ecological protection and environment improvement, social programs, and new infrastructure will be given priority, the guideline said.

The guideline also stressed that private enterprises will be given more support to participate in PPPs. For projects with strong public features, the equity ratio of private enterprises should be no less than 35 percent in principle.