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PPP Promotes Sustainable Development Jiao Xiaoping China Public Private Partnerships Center Ministry of Finance, Peoples Republic of China September, 2019 China's PPP Practice PPP in China = Governance + Project Management Macro-Level

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PPP Promotes Sustainable Development

Jiao Xiaoping China Public Private Partnerships Center Ministry of Finance, People’s Republic of China September, 2019

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China's PPP Practice

Macro-Level

Modernization 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

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Value for Money

Government, Market, Community China's PPP Practice

Regulatory Framework Capacity Building Demonstration Projects

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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

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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.

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Regulatory Framework

China's PPP Practice

Institution transformation: build a rule-of-law, service-

  • riented, 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

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Regulatory Framework

1st Batch 18 projects 7.3 billion USD 2nd Batch 157 projects 64.6 billion USD 3rd Batch 421 projects 127.2 billion USD 4th Batch 382 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%).

2014 2015 2016 2017

China's PPP Practice

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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 Sectors

u 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.)
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  • 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
  • f high-income group and upper-middle-income groups.

China's PPP Market: Global Assessment

China’s PPP Institution and Practices ranks upper-middle globally

82 76 61 54 77 58 63 66 64 57 48 63 58 52 44 53 54 47 39 47 10 20 30 40 50 60 70 80 90

PPP PROCUREMENT CONTRACT MANAGEMENT PPP PREPARATION UNSOLICITED PROPOSAL…

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

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  • 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
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K n

  • w

l e d g e

Share PPP & Infrastructure policies and

good practices to improve capacity building.

P r

  • j

e c t

Exchage project information to enhance transparency and facilicate project transcations.

I n v e s t m e n t

Bridge the investment from private sector to improve infrastructre financing.

The UNESCAP's Infrastructure Financing and PPP Network

China's PPP Practice

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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

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Case I

GUIYANG Nanming River Water Environment Treatment Project

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C

  • n

s t r u c t i

  • n

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 Return Mechanism Viability Gap Funding sewage treatment income +government-pay Contract Period

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

Investment 401 million USD Type

+ Brown Project + Green project

P r

  • c

u r e m e n t : Open Tendering

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35%

Planned investment : 625 million USD Actual 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

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Case II

YUNNAN Yuanmou Efficient Water-saving Project

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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

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Case III

GUIZHOU Wudang District Educational Facilities, Equipment and Logistics Services Project

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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 RMB Project 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

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Case IV

GU'AN Industrial Park Project

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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 RMB Type: BOT Duration: 30 years Contents: land arrangement, infrastructure development, public facilities, industry development, and urban operation. Project Benefits

Economic Growth

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THANKS

Website： http://www.cpppc.org/en/index.jhtml Wechat Account：道PPP Email: jiaoxiaoping@cpppc.org xiefei@cpppc.org

Official Website Official WeChat Account