Guiding Opinions of the National Development Reform Commission on Encouraging Private Capital to Participate in Government Social Capital Cooperation (PPP) Projects

The Development Reform Commission of all provinces, autonomous regions, municipalities directly under the Central Government, cities under separate state planning, Xinjiang Production Construction Corps:

In accordance with the spirit of the opinions of the Party Central Committee the State Council on deepening the reform of the investment financing system, in order to implement the "Guiding Opinions of the General Office of the State Council on Further Stimulating Effective Private Investment Vitality Promoting Sustainable Healthy Economic Development" (Guobanfa [2017] No. 79) It is required to encourage private capital to participate in the construction of infrastructure projects in a standardized orderly manner, promote the better development of the government social capital cooperation (PPP) model, improve the efficiency of public product supply, accelerate the construction of shortcomings, give full play to the key role of investment in optimizing the supply structure To strengthen the endogenous growth momentum of the economy, the following opinions are hereby put forward.

1. Create a good environment for private capital to participate in PPP projects

Continue to increase the opening up of the infrastructure sector, except for industries fields that are clearly prohibited by national laws regulations, all are open to private capital, private capital must be restricted participating in PPP projects in any name in any form. When formulating PPP policies, preparing PPP plans, determining PPP project implementation plans, it is important to listen to the opinions of private enterprises fully absorb adopt reasonable suggestions private enterprises. Actively serve private enterprises, continuously optimize the business environment, build a new "pro" "clear" relationship between government business, create a fairer, more standardized open market environment for private capital to participate in PPP projects. For PPP projects led participated in by private capital, the opening of "green channels" for handling preliminary work is encouraged. Encourage the introduction of more preferential policies in accordance with laws regulations based on the actual conditions of the region.

2. Classified policies to support private capital to participate in PPP projects

In view of the characteristics of the investment scale, cooperation period, technical requirements, operation management of different PPP projects, a variety of methods are adopted to actively support the participation of private capital, give full play to the advantages of private enterprises in innovation operation. For PPP projects with large commercial operation potential, moderate investment scale, suitable for private capital participation, actively support private capital holdings to improve project operation efficiency. For projects with large investment scale, long cooperation period, complex engineering technology, encourage private enterprises to cooperate with each other, cooperate with state-owned enterprises, foreign-invested enterprises, etc., participate by forming bidding consortia, setting up mixed ownership companies, etc., give full play to different enterprises Comparative Advantage. Encourage private capital to set up participate in investment funds, pool scattered funds, manage invest in PPP projects by professional institutions, obtain long-term stable returns.

3. Encourage private enterprises to use the PPP model to revitalize their existing assets

Actively adopt a variety of operation methods such as transfer-operation-transfer (TOT), reconstruction expansion-operation-transfer (ROT), standardize orderly activate stock assets, attract private capital to participate, avoid complicated project planning, site selection, land acquisition demolition The preliminary work is undertaken by private enterprises. The funds recovered the revitalization of assets are mainly used to make up for short-board project construction, form new high-quality assets, realize a virtuous circle of investment. For stock projects that are suitable for the PPP model, it is encouraged to use more methods such as transferring the project’s operating rights charging rights to revitalize the stock assets to reduce the difficulty of transfer improve the efficiency of revitalization. For stock projects that have adopted the PPP model, after consultation with the social capital party, under the premise of ensuring effective supervision, part all of the equity held by the government can be transferred to private enterprises through various methods such as equity transfer. For government investment projects under construction, actively explore, promote the PPP model in a standardized orderly manner, attract private capital to participate.

Fourth, continue to do a good job in the promotion of PPP projects for private enterprises

Relying on the PPP project database established by the online approval supervision platform for investment projects across the country, we regularly sort out incoming projects, carry out promotion work in a standardized orderly manner, PPP projects with clear return mechanisms, large operating income potential, mature preliminary work to private enterprises. Referral. Focus on the promotion of franchise projects based on user fees, prudently promote PPP projects that rely entirely on government payments, so as to reduce the pressure on local government expenditures prevent local debt risks. Local development reform departments should strengthen cooperation with local industry authorities, federations of industry commerce, industry associations, etc., promote high-quality projects, introduce typical cases, increase policy publicity, interpretation business training, help private enterprises better participate in PPP projects. .

5. Scientifically reasonably set the selection criteria for social capital

In strict accordance with the "People's Republic of China Tendering Bidding Law" the "People's Republic of China Government Procurement Law", the social capital party for PPP projects is selected through competitive methods such as open tender. Reasonably determine the qualifications of the social capital party, must set conditions such as registered capital, asset size, bank deposit certificates financing intention letters that exceed the actual needs of the project, must set access conditions that are related to project investment, financing, construction, operation. Standardize the setting of bid deposits. Except for legal compliant bid deposits, no bid guarantee requirements shall be set in any other name, the payment of deposits in the form of bank guarantees shall be promoted. Scientifically set bid evaluation standards, comprehensively consider factors such as bidders’ engineering technology, operational level, investment financing capabilities, bid quotations. Encourage the establishment of high-quality PPP project special purpose vehicles (SPV) other methods to integrate resources all parties, improve project governance structure, improve professional operation capabilities. Support social capital with a high proportion of private capital to participate in PPP projects mobilize the enthusiasm of private capital. Under the same conditions, priority is given to private enterprises with rich operating experience, high level of commercial operation, strong innovation creativity capabilities.

VI. Sign a standardized, effective comprehensive PPP project contract in accordance with the law

On the basis of full negotiation, benefit sharing, risk sharing with private enterprises, the PPP project contract shall be concluded objectively, rationally, comprehensively in detail. Clarify the responsibilities rights of all parties the method of dispute resolution, reasonably determine the price adjustment mechanism, scientifically set operating service performance standards, effectively set exclusive clauses to ensure the smooth implementation of the project. The PPP project contract should only regulate the investment behavior of private enterprises to ensure the continuous stable operation of the project, but also ensure that when the government fails to perform the contract in accordance with the law, the private enterprise can obtain reasonable compensation in a timely manner even withdraw legally. According to relevant laws, regulations contractual agreements, PPP projects shall be supervised throughout the life cycle. It is forbidden for the government investors to sign clauses that promise to repurchase the investment principal promise low returns. It is strictly forbidden to use the PPP model to raise debts in disguised form in violation of laws regulations, strictly prevent the hidden debt risks of local governments.

7. Increasing financing support for private capital PPP projects

Encourage government investment to support private capital PPP projects through capital injection, investment subsidies, loan interest discounts, etc., encourage PPP funds funded by governments at all levels to invest in private capital PPP projects. Encourage various financial institutions to give full play to their professional advantages, vigorously carry out PPP project financial product innovation, support the development of limited recourse financing based on the project's own cash flow, provide targeted private capital PPP projects with high-quality financial services. Actively promote the issuance of bonds for qualified private capital PPP projects, carry out asset securitization, expand project financing channels. In accordance with unified standards, credit ratings of private enterprises other social capital parties participating in PPP projects shall be conducted, financial markets financial institutions shall be guided to increase financing support for private enterprises based on the rating results.

8. Improve the PPP business capabilities of consulting agencies

Consultancy agencies must adhere to the principles of "legality, compliance, professionalism, self-discipline", in-depth study of the new requirements for private capital to participate in PPP project consulting services, strengthen PPP project planning, demonstration, construction, operation management capabilities, accurately grasp private capital participation in PPP The business demands of the project will improve the consulting service capability throughout the project. Improve the industry self-discipline management system, strengthen exchanges cooperation with the industry through various forms such as PPP consulting organization forums. Formulate improve PPP consulting business operating standards regulations, focus on solving PPP project engineering technology, bidding, investment financing, project management, legal financial problems, provide high-quality efficient consulting services for private capital PPP projects.

9. Selection of typical cases of private capital PPP projects

Among the PPP projects that have introduced private capital, all localities will promptly typical cases with reference demonstration value in terms of project operation standardization, reasonable transaction structure, sustained stable operation, business model innovation, clear return mechanism, summarize experience, strengthen publicity, give play to Demonstration effect. The National Development Reform Commission will organize experts relevant industry authorities to review screen cases submitted various regions, a number of typical cases for publicity, recommend the issuance of PPP project asset securitization products. For regions that support encourage private capital to participate in PPP project work proactively with many typical cases, preferential support will be given when arranging investment in the central budget for the preliminary work of PPP projects.

X. Strengthening the construction of a credibility system for cooperation between the government social capital

Establish complete a mechanism for keeping promises in PPP projects, accurately record objectively evaluate the performance of government private enterprises in the implementation of PPP projects. The government must strictly fulfill all agreed obligations, set an example of performance trustworthiness, resolutely put an end to the phenomenon of "new officials ignore old accounts". Private enterprises must also earnestly fulfill their contracts continue to provide high-quality reasonable-cost public products services. Incorporate the credit records of all parties in the PPP project into the national credit information sharing platform for sharing by various departments regions, publicize it through the "Credit China" website in accordance with the law. Subjects responsible for serious untrustworthiness were included in the blacklist joint punishments were carried out.

Encouraging private capital to participate in PPP projects is an important measure to implement the Party Central Committee the State Council on stimulating effective private investment vitality promoting sustained healthy economic development. It is an important starting point for giving full play to the key role of investment in optimizing the supply structure. Local development reform departments should attach great importance to strengthen organizational leadership, strive to remove the difficulties obstacles restricting private capital participating in PPP projects, effectively protect the legitimate rights interests of private capital, promote the standardized orderly development of private capital PPP projects.

National Development Reform Commission

November 28, 2017