PPP mode: feast for state-owned enterprises?
In recent years, the central government has launched a large number of PPP (PPP) projects......

      In recent years, the central government has launched a large number of PPP (PPP) projects.This kind of social capital participates in the government project construction model, received the local government "pursuit".
      Investigate its reason, is that finance minister Lou called "micro-level operating mode upgrade, macro institutional change" of the PPP mode, recognised by the height of the top countries, has become an important tool to implement the national strategy.After the establishment of PPP working group in May 2014, the state council issued article 43 on September 23, 2014, aiming at local debt liquidation.In the 2015 NPC and CPPCC government work report, steady growth became the top priority of government work.The PPP model is seen as a perfect weapon to break government monopolies and local debt.Under the weight of local debt, more than $40 trillion of new urbanization has forced local governments to introduce social capital in PPP mode to relieve the huge pressure on local governments.

      2015 is the first year of public and private partnership between various levels of government and social capital.PPP will be the main mode of cooperation in infrastructure projects.In this major change, the central enterprises and local state-owned enterprises respond to the new urbanization strategy, research and innovation, the PPP mode, boost the local economy construction and urban development, the historical choice is the development of market economy, and is the inevitable requirement of development as power to the nation.
      The PPP ushered in a period of growth
      2 April 1 solstice, the Treasury before the institute of fiscal science jia kang, director, the Asian development bank senior economist KeRuiGe and others in the PPP special meeting, training for several provinces and cities across the country fiscal system.The training involves the policy, experience, operation practice and implementation process of PPP mode.And this training session is just a microcosm of the popular PPP heat.
      Since the second half of last year, the PPP model pushed by the ministry of finance has been promoted in many provinces and cities across the country.In the local "two sessions", nearly 90 percent of local government work reports referred to PPP.
      Under the escort of policy, the PPP projects from all over the world to pragmatic.Harbin and luoyang as a pilot city, has been through multiple projects leading practice summing up experience, and heilongjiang, henan, zhejiang, hunan, fujian, Shanghai, and other provinces and cities also begin preparations for the project.Hebei, hunan, jiangsu and hainan have all issued guidance and implementation opinions, and promoted the mode of government and social capital cooperation.In 2015, the total investment of PPP projects announced by the provinces has exceeded the trillion yuan.Among them, the most dynamic sichuan province released 264 projects including comprehensive transportation, water conservancy projects, ecological environment protection and affordable housing, with a total investment of 253.4 billion yuan.
      PPP project plan of central and local governments, in particular, characterized by increased investment in public goods effectively, including shantytowns and dangerous house renovation, urban underground pipe network, such as people's livelihood projects, the Midwest rail and road, inland waterway transportation project, water conservancy, high standard farmland agricultural projects, such as information, power, oil and gas major network projects, such as clean energy and mineral resources protection project of oil and gas, the traditional industry technical transformation projects, energy conservation, environmental protection and ecological construction projects such as "seven major investment project package".These infrastructure industries have an important driving role and strategic layout significance for China's future economic development, which is the focus of investment and development in the future.Promote the central focus on the current national new urbanization development, regional development plan, free trade area, such as important strategic deployment, and "area" strategy, will produce a great infrastructure investment demand.
      Per capita infrastructure in China lags behind developed countries.Infrastructure construction will continue to run high for some time to come.Government hopes the PPP model introduced a batch of public-private partnerships, public or private win-win project, but was signed project partners, private enterprises have not become the main force, state, local state-owned enterprises and foreign enterprises as the main points of soup.
      At present, state-owned enterprises such as citic group, minmetals group, China railway construction and other central enterprises have been in the forefront of the PPP mode exploration in the fields of new-type urbanization, trust finance and infrastructure construction.
      Citic group is one of the pioneers of PPP mode in China and participated in the country's first PPP project "national stadium project".Citic bank is the first commercial bank to finance the PPP model project.The citic PPP model consortium, led by citic bank, provides a full process and a package of solutions for PPP projects through integrated resources to facilitate the integration of government and social capital.
      In August 2014, China railway construction company participated in the management of 500 km expressway and the construction of suburban railway.China has submitted a new comprehensive development project for urbanization in jinyang lake district, hunan liuyang economic and technological development zone.Minmetals corp. 's' trust in June 2014 and fushun Shen Fu new city management committee, build a game (group) co., LTD. Signed a $3.588 billion "Shen Fu new town government purchasing service cooperation framework agreement, carry out Shen Fu new city infrastructure construction.The minmetals trust is in the form of equity investment and becomes the absolute majority shareholder of the project company. The investment amount of the project contractor is 2 million yuan.
      Energy conservation in China is also pushing forward the PPP model, which is expected to lead the innovation of the industry model of environmental governance.The pilot project of multi-project pilot project of energy conservation and environmental protection technology co., LTD. Is a pioneer of PPP mode exploration and landing in the field of environmental governance.
      "With this national and even global PPP banquet, there is no doubt that there will be significant historic development opportunities in these areas with obvious operational advantages."Some experts say so.
      Business cooperation should pay attention to the spirit of contract
      Despite the surge of PPP, it is not new.In the 1980s, China introduced PPP model construction projects for more than 30 years.
      The PPP model turns out not to be a panacea.Throughout the current PPP application situation, there are many project failures or problems.The absence of a variety of reasons, such as the role of government, government and the support is insufficient, enterprise lack of large utility project management experience, did not have enough legal support, reasonable risk sharing, open and efficient bidding procedures, etc.The Asian development bank in the tail Wu Yan once said: "the technology is not standard, lack of commercial viability does not match, risk allocation mechanism, prepare adequately for the project and a series of factors can contribute to the PPP project failure."
      Enterprise observer reporter noticed that the state council "43" [i.e. the stock of local government debt clean disposal method (draft) "] before and after, 34 provinces, the local government introduced a large number of PPP project.But so far, only one in eight has signed up.

      The reporter combed through a series of PPP project policies that have been issued since last year, and all the local governments have proposed that the PPP project will be operated by market.Some policy hints that the government, already Mired in a debt crisis, will avoid being dragged into a failed PPP project.For example, anhui province has banned the government from guaranteeing the project. In the documents of henan and other governments, the government has made it clear that the government should not commit to providing excessive subsidies to social capital without the market risk.This may have been a cautionary tale for the government and the companies that have failed in the past.
      Financial engineering at the university of science and technology Beijing Liu Cheng explained to reporters the signing rate because of lower, "the PPP pattern of project profitability requirements higher, in line with the conditions of the project is less, at the same time, the PPP project investment period is long, low rate of return, investment period, a lot of various uncertain factors.In addition, many policies have yet to be put in place, and the risk-sharing mechanism is immature, so many companies are just waiting to see.
      In addition to the operating income of the project, the PPP projects often require the government to support the financing through the approval of the franchise, reasonable pricing or financial subsidies."If the government fails to properly price the issues, such as" people's livelihood ", can the enterprises "fulfill their repayment responsibilities without the proper pricing of the government?"A person in charge of project development at a large state-owned construction company in Beijing expressed confusion to reporters.He thinks, the PPP project operation period is long, the project period policy environment, market environment facing the enterprises will change, from the project selection to late, is responsible by the local government, the process is not reasonable, the contract is not standard, hard to dispute mediation and other issues.The previous PPP documents were dominated by guidance and guidebooks, lacking the binding documents of the PPP mode with stronger legal force.The new round of PPP should not only emphasize the financing function of PPP, but also pay more attention to the improvement of government management level and service concept.
      "From the government level, the government's business sense and spirit of contract must be in place, remove obstacles of the PPP model of law and the policy level, to as professional management, set up professional management agencies;From the enterprise level, to further deepen the study of the PPP model, using the PPP mode cannot be cut, the pursuit of incremental ignore the project risk and benefit, also can't rush in where angels fear to tread, on the sidelines waiting for miss of opportunities."A person in the east China regional headquarters told reporters.
      And hand in hand in investment in a subsidiary company built in the Ming highway asset securitization on the basis of the practice and exploration, buyout funds established in the hand in infrastructure, intentions in the party, make full use of financial leverage, move more social capital investment in high quality infrastructure projects, with as little money as possible to grasp the maximum market opportunities.