Project Support, Financing, and Management

NO	ASPECTS	DESCRIPTION
12.	Facilities Available to Facilitate Project Structuring and Transaction Advisory	China's State Council and governments at all levels have circulated a series of policy documents to promote wide use of PPP. Ministry of Finance has introduced the PPP Implementation Guidebook and PPP Project Contract Guidebook, and has proclaimed special financial subsidy policies targeting sponge cities and underground utility tunnel projects. Currently Ministry of Finance is engaged in developing guidelines on financial support to PPP project. Central and local finance departments are considering setting up PPP Fund and Substituting-Subsidies-with-Rewards Special Fund which will provide support to PPP projects.
13.	Role of Local Government	Governments at or above county level is responsible for PPP project approval, implementation and management in their own jurisdictions. Involved government payment obligations in PPP projects are included into the budget of the respective local government.
14.	Risk Sharing Policies/ Practices	Governments bear policy risk, legal risk and lowest demand risk. Private entities bear project design, implementation, operation and maintenance, and financial risks. Both parties share force majeure risks.
15.	Financing Mix Options Allowed	Under the premise of government's permission, PPP projects can be financed based on project assets or profits.
16.	PPP Promotions/ Marketing Mechanisms	China is speeding up legislation process to create an enabling legal environment, strengthening policy support to provide stable policy expectations, developing regulations including PPP project cost-effective evaluation, PPP project fiscal capacity appraisal and PPP project budget expenditure management, and bringing government's payment obligation into budgetary management to ensure government's performance capacities. China has also been proactively promoting financial innovation to improve investment climate by means of developing long-term loan products, setting up governmental guiding fund and industrial investment fund.
17.	Monitoring and Evaluation	China has constructed a comprehensive regulatory framework consisting of contract management, administrative supervision and public scrutiny: - Through setting reasonable performance guarantee mechanism, payment mechanism, violation responsibility and early termination mechanism in project contracts, it would strengthen legal restraint to and supervision on private sector in implementing a contract, thus making PPP projects fruitful. - Governments fulfill administrative supervision duties according to laws, and enhance administrative supervision in the aspects of work safety, sanitation and environmental protection during project construction and operation. - Through establishing information publicity and periodical release mechanism, it would ensure the public's right to know, enhancing public scrutiny to PPP projects.
18.	Dispute Resolution Mechanism	As for project contract disputes, which belong to civil relationship between equal, one could settle the dispute by civil action or civil arbitration. As for project approval and administrative regulation disputes, which belong to administrative legal relationship, one could settle the dispute by administrative reviews or administrative litigation.
19.	Land Acquisition	Considering the state ownership and collctive ownership of land in China, PPP projects would acquisit land by three means: - To access state-owned land use right by free allocation or compensated transfer; - To access collectively-owned land use right by leasing. Related land acquisiton, land levelling and demolition resettlement, in accordance with the agreement by the two parties, could be taken on by government or private sectors.
20.	Foreign ownership shares	Except sectors related to national securities, foreign enterprises and sino-foreign joint ventures could participate in PPP projects. And in principle, no share limits, while shall be in line with China's Government Procurement Law.
21.	Nature/ Scope of PPP Capacity Building Interventions/ Programs	- In the aspect of institutional improvement, Ministry of Finance is taking the lead to develop operation specifications for PPP including PPP project budget expenditure management, PPP project cost-effective evaluation and PPP project fiscal capacity appraisal, and is establishing evaluation index on project selection and risk management, in order to enhance comprehensive regulatory guidance on PPP projects. - In the aspect of project demonstration, Ministry of Finance is promoting PPP pilot projects, based on whose standard operation and experience, related benchmark and references will be formed. - In the aspect of promotion and training, Ministry of Finance is engaged in launching training work in PPP policy interpretation, project management and risk control, and enhancing government capacity building. - In the aspect of international cooperation, Ministry of Finance carries out wide cooperation with multilateral institutions such as World Bank, Asian Development Bank, and with competent government PPP agencies in Canada, Korea and Australia, so as to borrow international experiences.