PPP Promotes

Sustainable Development

Jiao XiaopingChina Public Private Partnerships Center

Ministry of Finance, People’s Republic of ChinaSeptember, 2019

China's PPP Practice

Macro-LevelModernization of national governance system and governance capacity

Micro-Level（Value For Money）

• Risk Sharing• Full Competition• Fiscal Affordability• Transparency• Whole life-cycle management• Performance-based payment

Meso-Level

• Reform of administrative system• Reform of fiscal system• Reform of investment and

financing system

PPP in China = Governance + Project Management

Value for Money

Government, Market, Community

China's PPP Practice

Regulatory

Framework

Capacity

Building

Demonstration

Projects

Regulatory Framework

Law

• Budget Law (amended)• Government

Procurement Act (amended) & its Enforcement Regulations

• PPP Law (being formulated)

Policy

• Guide on Provincial Government Debt Management

• Guide on Promoting PPP in Public Service

• Notice on Promoting PPP

• Notice on PPP Financial Management

Guideline• PPP Operating

Guidelines• PPP Contract Guidelines• PPP Project Procurement

Guidelines• PPP VFM Assessment

Guidelines• PPP Fiscal Affordability

Assessment Guidelines

Contract• PPP Contract Guidelines• PPP Contract Case Study• Standard PPP Contracts

For Various Sectors (being formulated)

Standard• PPP Project

Identification Criteria (Economy, Techniques, Finance, etc.)

• Output Criteria• Performance –based

Payment Criteria

China's PPP Practice

China's PPP Practice

• Optimize feasibility study and project structure.

• Incorporate maket responses to come up with a optimal implementation plan.

Value For Money Evaluation• Eveluate whether a PPP is likely to offer better value for the public than

traditional public procurement.

Business Case

• Set a 10% cap: local government spending on all PPP projects within its jurisdiction must not exceed 10% of general public budget expenditure.

Fiscal Affordability Assessment

• Establish the national online monitoring system on fiscal affordability of 2,584 cities/counties. The number of cities/counties exceeding the 10% cap decrease from 253 to 27 after the application of the monitoring system.

Regulatory FrameworkChina's PPP Practice

Institution transformation: build a rule-of-law, service-oriented, and transparent government

Led by the Ministry of Finance, cooperate with other line ministries

Establish PPP Centers/Units at national, provincial, municipal level

Build up PPP Integrated Information Platform to improve information disclosure

Involve PPP consulting agencies

Improve corporate social responsibility

Regulatory Framework

1st Batch18 projects

7.3 billion USD

2nd Batch 157 projects

64.6 billion USD

3rd Batch 421 projects

127.2 billion USD

4th Batch382 projects

100.5 billion USD

Demonstration Projects Case Studies

l Carried out four batches of demonstration projects from 2014 to 2017.l 978 projects, total investment 295.3 billion USD.l 908 reached the commercial close (92.8%).

20142015

2016

2017

China's PPP Practice

8

Municipal Engineering, 3,618,

40%

Transportation, 1,291, 14%

Environmental Protection, 896,

10%

Urban Development, 583,

6%

Education, 430, 5%

Water, 380, 4%

Tourism, 319, 4%

Healthcare, 263, 3%

Government Infrastructure, 198,

2%

Culture, 194, 2%

Affordable Housing, 154, 2%

Others, 138, 2%

Technology, 131, 1%

Energy, 119, 1%Sports, 118, 1%

Elderly Care, 104, 1%

Agriculture, 76, 1%Forestry, 57, 1%Social Security, 35,

0%

The Largest PPP Market

Total Projects: 9,104 preparation, procurement and implementation

Total Investment: 1.92 trillion USD

u 19 Sectorsu 5,896 projects reach the commercial close total investment 1.26 trillion USD

Impacts

• Increase public service supply

• Improve efficiency

• Optimize supply chain

• Create innovative models (EOD etc.)

• World Bank: Procuring Infrastructure PPPs 2018 assesses the regulatory frameworks and recognized good practices that

govern PPP procurement across 135 economies.

• In the assessment, the score for China’s PPP Procurement, Contract Management and Preparation is higher than the average

of high-income group and upper-middle-income groups.

China's PPP Market: Global AssessmentChina’s PPP Institution and Practices ranks upper-middle globally

8276

6154

77

5863

666457

48

6358

52

44

535447

39

47

0

10

20

30

40

50

60

70

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P P P P R O C U R E M E N T C O N T R A C T M A N A G E M E N T P P P P R E P A R A T I O N U N S O L I C I T E D P R O P O S A L …

China High-income Upper-middle-income Lower-middle-income Low-income

•Build a community with a shared future for mankind.

•Uphold the principle of extensive consultation, joint contribution and shared benefits.

•Support the implementation of the UN 2030 Agenda for Sustainable Development.

--- President Xi Jinping

China's PPP Practice

• New International Governance

• Multilateral Cooperation

• Bilateral Exchange

Knowledge

Share PPP & Infrastructure policies and good practices to improve capacity building.

Project Exchage project information to enhance transparency and facil icate project transcations.

Investment

Bridge the investment from private sector to improve infrastructre financing.

The UNESCAP's Infrastructure Financing and PPP Network

China's PPP Practice

Mobilize resources from three aspects: government, private sector and community.

Leverage two markets to facilate infrastructure development: domestic financing and international financing.

Use PPP as an effective tool for the UN 2030 SDGs.

PPP promotes UN 2030 SDGs

Case I

GUIYANG Nanming River Water Environment Treatment Project

Construction

Operation

•7 new sewage treatment plants (4,450,000 ton/day)•A new sludge disposal center (500 ton/day)•Sewage interception gutter renovation(52183 m in length, 40 exhaust ports transform)•Channel cleanout（1,136,600 m3）•Eco-restoration project（ecology gravel bed 45000m2，wetland 65000m2，aquatic plant 2500m2，4 set of permeable dike ）•Construct river information supervision system •Clean 25 drainage basins of Huaxi River

BOT+ TOT

ReturnMechanismViability Gap Funding

sewage treatment income+government-pay

ContractPeriod

Sewage and sludge operation period 30 years River comprehensive treatment service period 10 years

Investment

401 million USD Type

+ Brown Project + Green project

Procurement: Open Tendering

35%

Planned investment : 625 million USDActual investment:404 million USD

221 million USD less

Output Comparison

u Comprehensive treatment

u Energy saving

u Productivity improvement

u Quality service

BEFORE AFTER

Environment Protection

Case II

YUNNAN Yuanmou Efficient Water-saving Project

Case II YUNNAN Yuanmou Efficient Water-saving Project

Crop Growth in the Project Area

Project Investment 300 Million RMB

75,992,000 m2

Project Area

Project Covers 110 Villiages across 4 towns

Project includes • Two multi-level water intakes• 32.33km main water conveyance pipeline• 156.58km branch main water conveyance pipeline• 266.2 km branch main water distribution pipeline• 345.33 km branch water distribution pipeline

Project Benefits

• Water usage per Mu (1 Mu = 666.6 m2) decrease from 1259 to 350 RMB

• Farmers's income increase by 5000 RMB/Mu• Water saved by 21.58 million m3/year

Poverty Reduction

Case III

GUIZHOU Wudang District Educational Facilities, Equipment and Logistics Services Project

Case III GUIZHOU Wudang District Educational Facilities, Equipment and Logistics Services Project

Wudang District Zhenxin Kindergardern

3 Sub-projects: Wudang nine-year school (11443.28 m2) Wudang Shuitian middle-school(66667.19 m2) Wudang Zhenxin kindergardern(3364.68 m2)

Investment: 325.46 million RMBProject duration: 10 years

• Improve learning conditions of local children: 720 infants, 810 pupils, 1,800 middle-school students and 900 high-school students.

• Raise the standard of running a school facility in the suburb rural areas.

• Ease the tension between suburb and downtown residents regarding enrollment.

• Increase the housing price of the surrounding areas.

Project Benefits Equal Access to Education

Case IV

GU'AN Industrial Park Project

Case IV GU'AN Industrial Park Project

Poverty Alleviation

• Helps Gu’an transform itself from an agricultural society to a modernized industrial city.

• Increase fiscal revenue by hundred times. • Introduce over 600 companies and 30 +

universites and research institutions.

GU'AN Industrial Park UN Economic Commission for Europe Listed Gu'An in case studies of PPP Smart and Sustainable Cities.

Investment: 8.3 Billion RMBType: BOT Duration: 30 yearsContents: land arrangement, infrastructure development, public facilities, industry development, and urban operation.

Project Benefits Economic Growth

THANKS

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