PPP New Approach To Encourage Socialized Financing And Entrepreneurial Performance

The Executive Council of the State Council adopted the measures for the management of infrastructure and Public Utilities Franchise (hereinafter referred to as the "measures").

This method delineated the field of franchising, participants, financial subsidies and financing mechanisms.

In particular, it is possible to extend the financing channels by means of expected yield pledge loans, the establishment of industrial funds, the establishment of private equity funds and the issuance of various forms of notes and bonds.

A PPP expert who participated in the legislation process of franchising law told the Economic Observer newspaper that allowing the expected yield pledge loan to create financing conditions for PPP project financing means that the debts of the project will not be put into the balance sheet of the parent company. "At the present high debt ratio of the state-owned enterprises, this will help the state-owned enterprises, especially the central enterprises, to do more high-quality projects without being affected by the economic downturn".

However, he believes that the operation of the PPP project needs a cycle, and the recent economic growth is limited, but the effect will be obvious in the following years, and it is a long-term mechanism for economic growth.

According to the economic observer, it is still a pitional measure relative to the PPP basic law, and the legislative work of the franchise law will continue to push forward. The relevant ministries and commissions are further studying the issues raised by the parties in the previous consultation.

PPP legislation, namely the legislation of infrastructure and Public Utilities Franchise, was commissioned by the national development and Reform Commission by the National People's Congress law and order Commission. The main focus is on how private capital should enter the field of infrastructure and public utilities.

In the legislative plan of the Standing Committee of the twelve National People's Congress in 2014, the PPP legislation was originally classified into second categories, that is, "when we need to work hard and the conditions are ripe, we should consider it."

Draft.

Since then, the Standing Committee of the National People's Congress has pferred it from the second category to the first category, which means that the legislative process will be further accelerated.

In June 2014, the national development and Reform Commission forwarded the draft of the "franchise law" to all relevant ministries and commissions, and the Ministry of finance made suggestions on the draft, and communicated with the national development and Reform Commission.

But after that, the progress of the relevant departments in promoting the franchise legislation was slow. Moreover, the director of the policy and regulation department of the NDRC, who was in charge of the work, left, and the legislative work of the franchise law was led by the Legislative Affairs Office of the State Council.

The reason for the introduction of the franchise management method is that some of the problems in the original franchising law have not been formed, especially for the problem.

There are different ideas.

"The introduction of franchising is mainly to promote PPP, not for franchising.

PPP is from ownership, allowing social capital to have equity in infrastructure and public utilities through PPP mode. Franchising is from the industry management system. Monopoly industries are basically franchising. Before, mainly state-owned capital was franchised, and the problem was not prominent. Now social capital needs to be clarified, so the franchise has been started.

Jin Yongxiang, general manager of Dayue, said.

He said that many of the contents of the franchise law are now reflected in the franchise management method. The reason for the first management method is that the PPP projects are being widely promoted across the country. Many of them involve social capital entering monopoly industries, and if they rise to the legislative level, the time is too late.

It is understood that the future "

"It will be jointly promoted by the NDRC and the Ministry of finance.

In fact, the Ministry of finance also has a legislative content involving PPP, called "government and enterprise cooperation law", which has been included in the recent legislative work plan of the Ministry of finance.

A finance and tax official told the Economic Observer newspaper that the "government and enterprise cooperation law" mainly stipulates the scope of the government's purchase of services, selects the relevant conditions and procedures of enterprises, the rights and obligations of all parties, and the division of responsibilities between departments. There are also some problems in the management, supervision and other related laws of the future PPP operation process.

The PPP project, which provides financial subsidy by means of government purchase service, is the aspect that the Ministry of finance needs to promote and standardize.

In November 2014, when the Ministry of Finance went to South Korea to investigate PPP, it concluded that the annual PPP expenditure of the Republic of Korea is no more than 2% of the current fiscal revenue, and that of China's fiscal expenditure of 13 trillion is 260 billion, which is a large scale.