The State Council forwarded the Guiding Opinions on Standardizing the Implementation of the New Mechanism of Cooperation between Government and Social Capital.

CCTV News:According to the news of the Chinese government website on November 8th, the General Office of the State Council forwarded the notice of Guiding Opinions of the National Development and Reform Commission and the Ministry of Finance on Standardizing the Implementation of the New Mechanism of Cooperation between Government and Social Capital.

Guiding opinions on standardizing the implementation of the new mechanism of cooperation between government and social capital

The cooperation between government and social capital (PPP) has played a role in improving public services and stimulating effective investment to a certain extent in the past ten years, but there are also some problems that need to be solved urgently in practice. In order to implement the decision-making arrangements of the CPC Central Committee and the State Council, further deepen the reform of infrastructure investment and financing system, and effectively stimulate the vitality of private investment, we now put forward the following guiding opinions on standardizing the implementation of the new mechanism of government and social capital cooperation (hereinafter referred to as the new mechanism).

First, accurately grasp the overall requirements of the new mechanism

Guided by Socialism with Chinese characteristics Thought of the Supreme Leader in the New Era, we should thoroughly implement the spirit of the 20th Party Congress, adhere to the general tone of striving for progress while maintaining stability, implement the new development concept completely, accurately and comprehensively, accelerate the construction of a new development pattern, focus on promoting high-quality development, coordinate development and safety, standardize the implementation of the new mechanism of cooperation between government and social capital, give full play to the role of market mechanism, broaden the space for private investment, resolutely curb the hidden debts of new local governments, and improve the construction and operation level of infrastructure and public utilities projects to ensure standardized development.

(1) Focus on user-paid items. Government and social capital cooperation projects should focus on user-paid projects, and clarify the charging channels and methods. The project operating income can cover the construction investment and operating costs, and has a certain return on investment, so there is no additional responsibility for future expenditure of local finance due to the adoption of the government and social capital cooperation model. The government can give government investment support to user-paid projects during the project construction period on the premise of strictly preventing new hidden debts of local governments and meeting the requirements of laws, regulations and relevant policies and regulations, in accordance with the principle of equal treatment; Government payment can only subsidize operation according to regulations, not construction cost. In addition, financial funds shall not be used to make up for the project construction and operation costs by any means such as feasibility gap subsidy, guaranteed rate of return, and availability payment.

(two) all adopt the franchise mode. The cooperation between government and social capital should all be implemented in franchise mode, and the construction should be adopted reasonably according to the actual situation of the project — Operation — Transfer (BOT) and transfer — Operation — TOT and reconstruction — Operation — Transfer (ROT) and Construction — Have — Operation — BOOT, design — Construction — Financing — Operation — Transfer (DBFOT) and other specific implementation methods, and clearly stipulate the ownership of assets during construction and operation in the contract, and clearly define the rights, responsibilities and interests of all parties.

(3) Reasonably grasp key areas. The cooperation between government and social capital should be limited to projects with operating income, mainly including transportation projects such as roads, railways, civil aviation infrastructure and transportation hubs, logistics hub and logistics park projects, municipal projects such as urban water supply, gas supply, heating and parking lots, ecological protection and environmental governance projects such as urban sewage garbage collection and treatment and resource utilization, water conservancy projects with power generation function, social projects such as sports and tourism public services, and new infrastructure projects such as smart cities, smart transportation and smart agriculture.

(4) Give priority to the participation of private enterprises. It is necessary to adhere to the original intention and return to the original source, encourage private enterprises to participate in the newly-built (including renovation and expansion) projects jointly established by the government and social capital to the greatest extent, and formulate the List of Newly-built (including renovation and expansion) franchise projects supporting the participation of private enterprises (2023 edition) (hereinafter referred to as the list, see annex) and make dynamic adjustments. Projects with a high degree of marketization and weak public attributes should be wholly owned or controlled by private enterprises; For projects that are related to the national economy and people’s livelihood and have strong public attributes, the equity ratio of private enterprises shall not be less than 35% in principle; A few projects involving national security, strong public attributes and natural monopoly attributes should actively create conditions and support the participation of private enterprises. Private enterprises can be actively encouraged to participate in government and social capital cooperation projects outside the listed areas. Enterprises with foreign investment shall participate in government and social capital cooperation projects in accordance with the relevant requirements of foreign investment management and with reference to the above provisions.

(V) Defining the division of management responsibilities. The National Development and Reform Commission should take the lead in promoting the franchise model and effectively strengthen policy guidance. Local people’s governments at all levels should earnestly assume the main responsibility and standardize the promotion of franchise projects within the scope of government affairs at the corresponding level. Local people’s governments at all levels may authorize relevant industry authorities and institutions in accordance with laws and regulations as the implementation agencies of franchise projects (hereinafter referred to as project implementation agencies), and be responsible for the preparation of franchise plans, the selection of franchisees, the signing of franchise agreements, the supervision of project implementation, and the handover and reception after the expiration of cooperation. Local development and reform departments at all levels should play a comprehensive coordinating role, strictly control the relevant contents of the project franchise plan, and perform the duties of project approval, approval or filing according to laws and regulations. Financial departments at all levels should strictly implement the budget management system, strengthen local government debt management, increase financial supervision, and strictly enforce financial discipline.

(6) Steadily promote the implementation of the new mechanism. Grasp the intensity and pace of work. The projects that did not complete the bidding and procurement procedures before the clean-up and verification of government and social capital cooperation projects in February 2023, as well as the newly implemented government and social capital cooperation projects, should be implemented in accordance with the new mechanism stipulated in these guidelines, and the Notice of the General Office of the State Council on Forwarding the Guiding Opinions of the People’s Bank of the Development and Reform Commission of the Ministry of Finance on Promoting the Cooperation Mode of Government and Social Capital in the Field of Public Services (Guo Ban Fa [2015] No.42) issued in May 2015 will no longer be implemented.

Second, standardize and promote the implementation of construction

(seven) strictly review the franchise plan. For the project to be implemented by franchising mode, the project implementing agency should take the lead in compiling the franchising scheme with reference to the compilation standard of feasibility study report, and perform the auditing procedures by the relevant parties with reference to the examination and approval authority and requirements of government investment projects, so as to reasonably control the content and scale of the project construction and clarify the project output (service) scheme. When reviewing the franchise plan, we should simultaneously carry out the feasibility demonstration of the franchise model, and carefully compare and demonstrate whether the project is suitable for adopting the franchise model; When necessary, we can entrust a professional consulting agency to evaluate and improve the quality of feasibility study.

(8) Fair selection of franchisees. The project implementation agency shall, according to the approved franchise plan, select franchisees according to laws and regulations through open competition (including franchisees consortium, the same below). The project operation plan, charging unit price and franchise period should be regarded as important evaluation criteria for selecting franchisees, and their project management experience, professional operation ability, comprehensive strength of enterprises and credit rating should be paid close attention to. The selected franchisee and its investment, financing and construction responsibilities shall not be adjusted in principle, and the franchisee selection procedure shall be re-performed if it is really necessary to adjust. According to the relevant provisions of the state and the project construction investment, operating costs, investment recovery period, etc., the franchise period is reasonably determined to fully protect the legitimate rights and interests of franchisees. In principle, the franchise period shall not exceed 40 years, and the franchise projects with large investment scale and long return period may be appropriately extended according to the actual situation, unless otherwise stipulated by laws and regulations.

(9) Standardize the signing of franchise agreements. Project implementation agencies and franchisees should sign franchise agreements on the basis of equal legal status and equal rights and obligations. Where a project company needs to be established, the project implementing agency shall sign an agreement with the franchisee to set up the project company within the prescribed time limit and sign a franchise agreement with the project company. The franchise agreement shall specify the project implementation scope, output (service) quality and standard, investment income acquisition method, project risk control, agreement change, franchise period and other contents, and stipulate the rights, obligations and responsibilities of both parties.

(ten) strictly implement the investment management procedures. The franchise projects supported by the government by capital injection shall go through the examination and approval procedures in accordance with the relevant provisions of the Regulations on Government Investment; For projects invested by social capital alone, the approval or filing procedures shall be performed in accordance with the relevant provisions of the Regulations on the Administration of Approval and Filing of Enterprise Investment Projects. Standardize the implementation of the project adjustment procedures, and complete the examination and approval or filing procedures. If there are major circumstances such as changing the construction site, adjusting the main construction contents and adjusting the construction standards, it should be reported to the original examination and approval authority to re-perform the project audit procedures, and if necessary, re-launch the feasibility demonstration of the franchise model and the audit of the franchise plan. After the establishment of the legal person of the franchise project, if it is inconsistent with the legal person of the project when going through the formalities of examination and approval, land use and planning in the early stage, the project legal person shall be changed according to law, and the project implementation agency shall give necessary support and convenience.

(eleven) do a good job in the implementation and management of project construction. Franchisees should do the preliminary work of the project, optimize the project construction plan in strict accordance with the relevant regulations, arrange the construction period reasonably, effectively control the cost, ensure the project quality, and make good preparations for operation. For projects with complex geological conditions, high construction risks and difficulties in maintenance, we should improve the survey and construction design, strengthen the control of construction risks, and prevent the project from going bad. After the completion of the project, the completion acceptance and special acceptance shall be organized in time according to the law and regulations. Projects that need trial operation or trial operation shall meet the corresponding requirements and obtain the license for trial operation or trial operation before being put into trial operation or trial operation.

Third, effectively strengthen operational supervision

(twelve) regularly carry out project operation evaluation. The project implementation agency shall, jointly with relevant parties, monitor and analyze the operation of the project, carry out operation evaluation, assess potential risks, establish a restraint mechanism, and effectively guarantee the quality and efficiency of public products and services. Project implementation agencies should take public opinions as an important part of project monitoring, analysis and operation evaluation, strengthen public supervision, and carry out performance evaluation in accordance with relevant regulations.

(thirteen) disciplinary violations and dishonesty. If the franchisee violates laws, regulations and national mandatory standards, seriously endangering public interests, resulting in major quality and safety accidents or sudden environmental incidents, the relevant parties should be ordered to make corrections within a time limit and punished according to laws and regulations. If the public products and services provided do not meet the standards stipulated in the franchise agreement, the franchisee shall bear the liability for breach of contract in accordance with the agreement. Incorporate the untrustworthy information of project stakeholders into the national credit information sharing platform according to the law and regulations.

(fourteen) standardize the franchise agreement change and project transfer. During the validity period of the franchise agreement, if it is really necessary to change the contents of the agreement, the parties to the agreement shall sign a supplementary agreement according to law on the basis of consensus. If the franchise period expires or terminates ahead of schedule, it shall be handed over or withdrawn in accordance with the law and regulations as agreed in the agreement, and it is strictly forbidden to change the franchise into construction on the grounds of early termination — Transfer (BT) mode to borrow in disguise; If you intend to continue to adopt the franchise mode, you should re-select the franchisee according to the regulations, and you can give priority to the original franchisee under the same conditions. If the franchisee needs to be re-selected for reasons such as reconstruction and expansion during the franchise period, the original franchisee can be given priority under the same conditions. All kinds of disputes arising from franchise agreements are encouraged to be settled through friendly negotiation. If necessary, according to the nature of disputes, they can apply for arbitration, apply for administrative reconsideration or bring administrative or civil proceedings in accordance with the law, and properly handle and solve them.

(15) Establish a normalized information disclosure mechanism. The project implementation agency shall disclose the non-confidential information such as the project construction content, the winning bid result of franchising, the main contents of franchising agreement, public products and public service standards, operation assessment results, etc. to the public in a timely manner, relying on the national online approval and supervision platform for investment projects. The franchisee shall disclose the quarterly operation of the project, audited annual financial statements and other information to the public through appropriate means.

Fourth, increase policy support.

(sixteen) to strengthen the organization and implementation. All regions should compact the main responsibility, improve the working mechanism, and carefully organize the implementation. All relevant departments should strengthen coordination, clarify policies and regulations, and strengthen supervision. The National Development and Reform Commission shall formulate an outline of the franchise plan, a model franchise agreement and detailed implementation rules, guide all regions to implement government and social capital cooperation projects in compliance with the law and in a safe and orderly manner in accordance with the requirements of the new mechanism, and timely revise and improve the relevant institutional documents of franchising in conjunction with relevant parties to create a good institutional environment.

(seventeen) do a good job in factor protection and financing support. Support the development and construction of underground space under the premise of not changing the original category of the project surface and the current use situation, and improve the land use efficiency. Support the rational adjustment of land planning use and development intensity according to laws and regulations, promote the transformation and transformation of original assets through franchise mode, and improve the efficiency of asset utilization. Explore the hierarchical establishment of state-owned construction land use rights, and support projects to speed up the preliminary procedures according to laws and regulations. Encourage financial institutions to provide financing support for franchise projects by means of expected income pledge in accordance with the principles of controllable risks and sustainable business. Actively support qualified franchise projects to issue real estate investment trusts (REITs) in infrastructure.

(eighteen) to support the implementation of innovative projects. Encourage franchisees to reduce construction and operation costs, improve investment returns and promote the better implementation of government and social capital cooperation projects through technological innovation, management innovation and business model innovation. On the premise of ensuring the project quality and output (service) effect, the additional income obtained by the franchisee through strengthening management, reducing costs, improving efficiency and actively innovating mainly belongs to the franchisee. Encourage qualified state-owned enterprises to participate in revitalizing existing assets through franchising mode norms, and form a virtuous circle of investment.

List of new franchise projects (including renovation and expansion) that support private enterprises to participate.

(2023 edition)

I. Projects that should be wholly owned or controlled by private enterprises

(A) the field of environmental protection

1. Solid waste treatment and garbage incineration power generation project

(2) Municipal field

2. Infrastructure projects in the park

3. Public parking project

(3) Logistics field

4. Logistics hub and logistics park projects

(4) The field of agriculture and forestry

5. Agricultural waste resource utilization project

6. Tourism agriculture and leisure agriculture infrastructure projects

7. Forestry ecological projects

(V) Social field

8. Sports events

9. Tourism public service projects

Two, the proportion of private enterprises in principle not less than 35% of the project.

(A) the field of environmental protection

10. Sewage treatment project

11. Sewage pipe network project

(2) Municipal field

12. Urban water supply, gas supply and heating projects

(3) The field of transportation

13 intercity railways, resource development railways and feeder railways, and commercial and extended business projects of railway passenger and cargo transportation.

14 toll road projects (excluding toll road projects with large investment scale and high construction difficulty)

15. Low-volume rail transit projects

(D) Logistics field

16. Airport Freight Handling Facilities Project

17 national logistics hub and national backbone cold chain logistics base project

(V) Water conservancy field

18 small water conservancy projects with power generation function

(VI) The field of new infrastructure

19. Smart cities, smart transportation, smart agriculture and smart energy projects.

20. Data center project

21. Artificial intelligence computing infrastructure project

22. Civil space infrastructure projects

Three, actively create conditions to support private enterprises to participate in the project.

(A) the field of transportation

23 railway projects included in medium and long-term railway network planning, special planning approved by the state and regional planning.

24 projects such as toll roads with large investment scale and high construction difficulty.

25 urban subway, light rail and urban (suburban) railway projects

26. Civil transport airport project

(II) Energy field

27. Rural power grid transformation and upgrading project

28 oil and gas pipeline network trunk or branch projects

29. Oil and natural gas storage facilities project

(3) Water conservancy field

30 large and medium-sized water conservancy projects with power generation function