Lack of PPP knowledge may hinder wave of infrastructure construction

Against the background of countries around the world painfully extricating themselves from the global financial crisis, the central government has on the one hand been clearing and regulating local government debt, and on the other been supporting and promoting new urbanisation and accelerating the construction of infrastructure. The central government has decided to promote the PPP (public-private partnership) model on a nationwide scale since the end of 2013, so as to accelerate the development and construction of the nation’s infrastructure. As a new infrastructure construction model, PPP represents central government efforts to spark a third wave of infrastructure construction. However, the author has discovered that, in practice, both government authorities’ and enterprises’ knowledge of the PPP model is rather vague.

The meaning of PPP

The term “PPP model” means a construction co-operation model between a government and an enterprise for the purpose of co-operating in the construction of an urban infrastructure project, or the provision of certain public goods or services, where the parties co-operate for the development of the project, jointly bear the risks, and share in the benefits. Under this model, the government and the enterprise clarify their respective rights and obligations through the execution of a contract. Such a model ultimately leads to a more beneficial result for the parties than if they act independently.

The concept of PPP is relatively broad. The definitions of PPP given by relevant international organisations and development organisations are more or less similar. The author has listed some definitions of PPP given by some major international organisations.

北京市建国门外大街甲6号SK大厦36-37层

邮编: 100022

36-37/F, SK Tower

6A Jianguomenwai Avenue

Beijing 100022, China

电话 Tel: +86 10 8800 4223

传真 Fax: +86 10 6655 5566

www.zhonglun.com

电子信箱 E-mail:

wangjihong@zhonglun.com