China to deal with over 170 problematic pilot PPP projects

The Ministry of Finance (MOF) announced on Friday it would further strengthen regulation over pilot public-private partnership (PPP) projects, and will deal with 173 problematic projects.

Though pilot projects have played an active role in providing a standard for PPP operations and driving regional development, some pilot projects have problems such as sluggish growth and improper implementation, according to a statement posted on the MOF’s website.

The MOF also stressed the importance of preventing risks in the projects, saying the authorities should carefully inspect PPP contracts.

Contracts should not state that governments or appointed subjects would guarantee a refund on private investments, and that governments would guarantee minimum investment returns.

Governments should not provide any kind of guarantee collateral or financing for PPP projects.

Thirty PPP projects have been scrapped, including a highway project in Baotou, North China’s Inner Mongolia Autonomous Region, and removed from the government’s database of projects, the MOF said.

Fifty-four projects that have not received funding will be removed from the list of the pilot PPP projects, though will remain in the database of PPP projects.

As for another 89 projects with nonstandard operations with loose purchase procedures or unqualified contract subjects, provincial financial departments should rectify them by the end of June or will be removed from the pilot PPP project list.