At 9:30 am on May 5, 2015, the National Development and Reform Commission held a press conference in the large conference room on the third floor of the Central Annex Building of the National Development and Reform Commission. The theme was "Infrastructure and Utilities Franchise Management Measures" ”, relevant responsible comrades from the National Development and Reform Commission attended the press conference and answered reporters’ questions.
The following is the transcript of the press conference:
Li Pumin:
Dear journalists, good morning! Welcome to the regular press conference of the National Development and Reform Commission. At today's press conference, Mr. Li Kang, Director of the Department of Regulations, and I will introduce to you the relevant situation of the "Infrastructure and Utility Franchise Management Measures" and answer your questions. Below, I will briefly introduce some general situations.
Carrying out franchising of infrastructure and public utilities is an important reform and institutional innovation, which is conducive to expanding private investment, stimulating social vitality, and increasing the supply of public products and services. Since the Shenzhen Shajiao B power plant project was franchised in 1984, my country has been carrying out infrastructure and public utility franchises for more than 30 years. Over the past 30 years, various localities have launched a large number of franchise projects, and the relevant departments of the State Council and relevant provinces and cities have formulated more than 60 local laws, regulations or normative documents.
In recent years, in response to the increasing downward pressure on the economy and the decline in the power of traditional growth engines, the state has actively taken effective measures to give full play to the key role of investment in stabilizing growth and promote stable and healthy economic development. Especially since last year, with the approval of the State Council, the National Development and Reform Commission has taken the lead in implementing seven major categories of investment project packages and six major fields of consumption projects, and launched 80 demonstration projects to encourage social capital, especially private investment, to participate in construction and operation. Relevant localities have also extensively attracted social investment and launched a number of government-private capital cooperation projects, which have achieved positive results.
However, in practice, relevant parties, especially market entities, have also reported some urgent problems that need to be solved, mainly: the lack of unified institutional norms at the national level, imperfect protection mechanisms for private investment rights and interests, and cumbersome administrative approval procedures. wait. These problems have affected the enthusiasm of social capital to participate and restricted the healthy development of franchising.
The Party Central Committee and the State Council attach great importance to this. The Third Plenary Session of the 18th Central Committee of the Communist Party of China clearly required “to formulate specific measures for non-public enterprises to enter the franchising field.” Leaders of the State Council have issued important instructions on many occasions, requiring the promotion of project financing, franchising and other models, attracting more social capital to participate in construction and operation, actively promoting relevant legislation, and providing legal protection to encourage private capital to enter relevant fields.
In order to implement the requirements of the Party Central Committee and the State Council, in accordance with the key points of the reform work of the Central Leading Group for Comprehensive Deepening of Reform in 2015, the five-year legislative plan of the 12th National People's Congress and the legislative plan of the State Council, the National Development and Reform Commission The Infrastructure and Utilities Concession Law is being drafted in conjunction with relevant departments. At the same time, taking into account the current urgent task of promoting private investment and stabilizing economic growth, and in accordance with the principle of urgent needs first, our committee jointly drafted the "Infrastructure and Public Utilities" with the Ministry of Finance, the Ministry of Housing and Urban-Rural Development, the Ministry of Transport, the Ministry of Water Resources, and the People's Bank of China. "Franchise Management Measures" were submitted to the 89th State Council Executive Meeting for review and approval, and will come into effect on June 1 this year.
The "Measures" *** include 8 chapters and 60 articles, which provide relatively comprehensive and detailed provisions on the scope of application, implementation procedures, policy support, etc. of infrastructure and public utility franchises. The main contents include the following five aspects: First, determine the applicable fields. The "Measures" clearly stipulate that franchise operations should be carried out in the fields of energy, transportation, water conservancy, environmental protection, municipal administration and other infrastructure and public utilities. The second is to clarify the scope of application. The "Measures" stipulate that domestic and foreign legal persons or other organizations can participate in the investment, construction and operation of infrastructure and public utilities within a certain period and scope through open competition and obtain benefits. The third is to improve policies and measures. The "Measures" emphasize that it is necessary to improve the franchise price and charging mechanism. The government can provide necessary financial subsidies according to the agreement and simplify planning site selection, land use, project approval and other procedures. The fourth is to strengthen financing support. The "Measures" propose that loans pledged with expected returns for franchise projects are allowed, equity participation in the form of industrial funds and other forms is encouraged to provide project capital, project companies are supported in establishing private equity funds, and the issuance of project income notes, asset-backed notes, corporate bonds, and corporate bonds is etc. to expand financing channels. Policy and development financial institutions can provide differentiated credit support, with loan terms up to 30 years. The fifth is to strictly supervise contract performance. The "Measures" make it clear that contracts must be strictly performed and joint punishments implemented to protect the legitimate rights and interests of franchisees, stabilize market expectations, and attract and expand effective social investment.
The issuance of the "Measures" is an important measure to guide and standardize infrastructure and public utility franchising and promote cooperation between government and social capital. It is conducive to protecting the investment rights and interests of private capital, promoting the transformation of government functions, and improving public * **Service quality and efficiency are of great significance to stabilizing growth, adjusting structure, making up for shortcomings, and benefiting people's livelihood. In the next step, our committee will work with relevant departments to implement the "Measures" and carry out supervision and inspection of local implementation in a timely manner.
I will briefly introduce the overall situation here. Now, please ask your questions. Please ask only one question and please inform the media you represent.
China Economic Herald, China Development Network:
I have a question for Director Li. Now some private investors have reported that the implementation period of concession projects is long and requires long-term cooperation and cooperation from the government. Support, the government sometimes fails to fulfill its price adjustment commitments in accordance with the franchise agreement, or once the government changes or the person in charge changes, the original franchise agreement may be adjusted or modified, and some governments may even directly breach the contract. In this regard, the "Measures" What measures are taken? Thanks.
Li Kang:
The issues raised by this journalist friend are indeed of great concern to us in the process of drafting the "Franchise Management Measures" together with relevant departments. Franchise projects often involve large investments, long cycles, involve multiple stakeholders, and are related to various government departments and some intermediary agencies. Therefore, they require long-term, stable and predictable cooperation and support mechanisms from the government.
In practice, sometimes it does happen that some local governments and relevant departments do not fulfill their price adjustment commitments in accordance with the franchise agreement. Some promised quite well and would give you a guarantee of your interests. After a few years, the mayor changed and the main person in charge was adjusted, so they no longer recognized it. They said that I didn’t know about this agreement and it might lead to the original franchise. Agreements need to be revised and adjusted, and some governments directly breach the contract and refuse to admit their debts. Such situations do exist, and we need to focus on solving them in legislation. Therefore, we believe that the core of franchising itself is the negotiation agreement between the government and society, taking risks, long-term cooperation, each showing its strengths, and jointly providing high-quality public products and services. In this sense, the government's honest performance of contracts is crucial, and is very important for protecting the rights and interests of investors, stabilizing franchise expectations, and continuing to ensure the supply of public products and public services.
Therefore, the "Measures" attempts to make institutional arrangements in three aspects: First, it emphasizes consultation and cooperation between the two parties. Article 4 of the Measures refers to "transforming government functions and strengthening consultation and cooperation between the government and social capital" as a franchise. One of the four principles of implementation. Article 18 further stipulates that the government shall sign a franchise agreement with the franchisee selected in accordance with the law and stipulate the rights and obligations of each party through the agreement. What responsibilities the government has and what it can and cannot do must be clearly stated in advance in the agreement. This is a very important requirement. At the same time, Article 37 stipulates that if the content of the agreement really needs to be changed, a supplementary agreement should be signed on the basis of consensus. Sometimes there are unpredictable factors in the business process that require supplements and adjustments to individual terms of the agreement. This is also reasonable. It is necessary to emphasize collegiality and consultation between the two parties, and the government cannot have the final say unilaterally, because the government controls public resources and decides public policies. It cannot make adjustments or make corrections when it feels it is necessary. This needs to be done in specified in the Measures. Chapter 6 of the "Measures" on dispute resolution methods also emphasizes equal consultation between both parties and gives full play to the mediation role of experts and third-party institutions. The "Measures" reflect the consultation and cooperation between the two parties in terms of principles and specific system design.
The second is about strict government performance obligations. Article 26 stipulates that all parties to a franchise agreement shall abide by the principle of good faith and fully perform their obligations as agreed. Article 21 stipulates that the government can make commitments on preventing similar competition, financial subsidies, and the provision of supporting infrastructure. Article 34 also stipulates that the government shall strictly perform relevant obligations in accordance with the agreement and provide convenience and support to franchisees. It is particularly emphasized that adjustments to administrative divisions, changes in government, department adjustments and changes in persons in charge shall not affect the franchise agreement. performance. It turns out that we also thought that this requirement is quite sharp, and legislative provisions generally do not write this way. However, considering that legislation must solve the problem, we discussed with the relevant departments and added a special clause in the "Measures". Administrative division adjustment and change of person in charge cannot be used as the reason and basis for supplementary modification, adjustment or abolition of the franchise agreement. .
The third is to clarify the government’s liability for breach of contract. The government is not only the performer of public power. It cannot just be your government that has the final say. If it breaches the contract and fails to fulfill its commitments in accordance with the prior peace negotiation between the two parties, you will also be asked. Article 26 of the "Measures" clearly requires the government If the party fails to perform the obligations stipulated in the franchise agreement or the performance of the obligations does not meet the agreed requirements, it shall continue to perform, take remedial measures or compensate for losses in accordance with the agreement.
In short, the "Measures" attempt to enhance the government's awareness of contract performance, restrain the government's public rights, and create a good investment environment through the above-mentioned series of regulations and institutional arrangements, with a view to leveraging social investment and stimulating social innovation. and creative vitality, increasing the supply of public products and public services. Thanks.
Guangming Daily:
When I just explained it, I talked about strengthening consultation and cooperation between the government and social capital. We also know that the country has recently issued documents related to PPP, and various places are also carrying out discussions on PPP. To explore, I would like to ask what is the connection between PPP and the relevant content announced this time? Thanks.
Li Kang:
Many parties are concerned about the relationship between franchising and PPP. Here I am happy to share with you some of my preliminary understanding. In fact, the cooperation between government and social capital, the so-called PPP, has a relatively broad scope and connotation. We have also done a lot of research, including some domestic and foreign legislative cases, as well as some practices in China.
PPP is also called public-private partnership, which includes franchising, equity cooperation, government purchase of services and other forms. For example, the United Kingdom transfers and sells some shares of joint ventures and state-owned enterprises. In particular, some experts also regard so-called privatization as a specific category of public-private partnerships, and so on. We have studied the cases of many international organizations and countries, including the United Nations Commission on Trade Law, Europe, Japan, South Korea, etc., and found that PPP is mainly in the fields of infrastructure and so-called public construction, specifically through franchising and implementation. Completed. According to incomplete statistics from the World Bank, since the 1990s, my country has organized more than 1,000 franchise projects in the fields of transportation, energy, and municipal administration. According to preliminary statistics, the proportion of urban sewage treatment and public water projects in China that implement franchises reaches 42% and 20%.
Therefore, after the "Measures" were promulgated, some industry experts felt that the "Measures" were an important institutional design for promoting the PPP model, so they considered it the basic law of PPP. I have no comment on this. I think the reason why the "Measures" adopts the concept of franchising instead of PPP is due to several basic considerations: First, the scope of adjustment is relatively clear. Because the connotation and denotation of infrastructure and utility franchises are relatively easy to grasp. Article 2 of the "Measures" stipulates the scope of application based on key areas for promoting private investment, Article 3 draws on relevant domestic and foreign regulations to clarify the definition of franchising, and Article 5 summarizes practical practices and stipulates the basic methods of franchising. I understand that this is different from government purchase of services and equity cooperation in terms of nature and connotation.
Second, it is easier for all parties to understand and accept. Because the concept of franchising has been used in China for decades, the Secretary-General also introduced just now that from the 1980s to the present, the concept of franchising has basically been used in China's practice. Relevant departments of the State Council and various provinces and cities have issued a large number of local laws, regulations, and normative documents related to franchising, all of which use the concept of franchising. Therefore, continuing to use this term is conducive to maintaining the continuity of policies and systems, and also facilitates implementation. .
Third, it is in line with international practice. PPP is a general term and summary of public-private cooperation. As mentioned just now, privatization and privatization are both public-private collaborative partnerships. There is also a lack of a unified and authoritative international understanding. There are also some disputes about the specific scope of regulations. Therefore, in the process of drafting the "Measures" We proposed such a name based on China's practice and the legislative practices of foreign countries and international organizations. For example, the United Nations Commission on Trade Law's "Model Law on Private Financing of Infrastructure", the EU's "Directive on the Procedure for the Award of Concession Contracts", clearly uses the term franchise, Russia's "Federal Franchise Law", and Mongolia's "Franchise Law" 》. So I would like to introduce to you why the concept and terminology of franchising is used in China. Thanks.
Li Pumin:
I would also like to introduce to the reporters some of the work and achievements of the National Development and Reform Commission in promoting PPP. In accordance with the requirements of the State Council, starting from the second half of last year, the National Development and Reform Commission acted quickly to actively promote the PPP model, mainly doing four aspects of work:
First, in the "On Encouragement of Investment and Financing Mechanisms in Key Areas of Innovation" In the document "Guiding Opinions on Social Investment", a separate section puts forward clear requirements for establishing and improving the PPP model promotion mechanism. This document is also the first to systematically explain the implementation of the PPP model in the name of a State Council document. Second, in order to strengthen the normative guidance of the PPP model and promote the smooth implementation of PPP projects, the National Development and Reform Commission issued the "Guiding Opinions on Carrying out Cooperation between Government and Social Capital", which proposed the construction of PPP projects in terms of applicable fields, operating procedures, operating specifications, etc. normative requirements. Third, in order to effectively solve the problems reported by various localities regarding the lack of financial support for PPP projects with matching deadlines and appropriate costs, the National Development and Reform Commission and the National Development Bank jointly issued the "Notice on Promoting Developmental Finance to Support Cooperation between Government and Social Capital", proposing that The China Development Bank provides differentiated credit policies for PPP projects in terms of interest rates and loan terms up to 30 years. Fourth, in order to do a good job in promoting PPP projects and encourage and guide social investment, the National Development and Reform Commission issued the "Notice on Further Improving the Promotion of Government-Private Cooperation Projects", promptly summarized the projects recommended by various places, established the National Development and Reform Commission PPP project database, and Create a column on the committee's portal website to publicly release project information, assist localities in increasing publicity efforts, and guide social investment from a wider scope.
With the joint efforts of all relevant parties and localities, the promotion of the PPP model has made positive progress. I introduced to you at the beginning that 80 first batches were launched last year to encourage the participation of social capital. investment projects, and the construction of these projects is currently progressing smoothly. In the next step, the National Development and Reform Commission will mainly carry out two aspects of work: on the one hand, it is to organize and implement the management measures for infrastructure and public utility franchises; on the other hand, it is to publish typical cases in PPP and strengthen the guidance of the cases.
Economic Voice of Central People's Broadcasting Station:
Many places now report that private investment is willing to participate in infrastructure and public utility franchises but there is a lack of action and a wait-and-see attitude. The "Measures" are in Are there any support and encouragement measures to promote private investment in the franchising field? Thanks.
Li Kang:
The issues you mentioned are also ones we often hear. Many private capital and entrepreneurs have reported the "three-door" phenomenon, namely the "glass door", "spring door" and "revolving door". We have also tried hard to solve this problem in this "Measures" and have taken three specific measures.
First, strengthen the protection of legitimate rights and interests. Article 4 of the "Measures" stipulates that among the four principles for franchising, two specifically emphasize the need to "give full play to the advantages of social capital financing, expertise, technology and management to improve the quality and efficiency of public services" and "protect the society." The legitimate rights and interests of capital ensure the continuity and stability of the franchise." In fact, private capital and market entities very much hope that the relevant departments of the State Council will coordinate their actions and make it clear that franchised private capital is legally protected. When we entrusted the All-China Federation of Industry and Commerce to solicit the opinions of market entities, especially private capital, they also called for , this principle must be written down in legislation. So I think this is very important, not only as a principle, but also as a concrete action. At the same time, Article 27 of the "Measures" clearly stipulates that no unit or individual may interfere with the legitimate business activities of franchisees. Articles 36, 38, and 40 respectively stipulate that franchisees have the right to receive compensation and the priority to renew the contract.
Second, strengthen financing service innovation. Infrastructure investment has a long cycle, high risks, and huge amounts of money involved, so it requires strong support and cooperation from financial institutions. In Articles 17, 23, and 24 of the "Measures", some specific financing policies are proposed. In the first paragraph of Article 17, financial institutions are encouraged to jointly formulate investment and financing plans with legal persons or other organizations participating in the competition. Article 23 stipulates innovative credit methods and credit policies, encourages innovative financial services, provides differentiated credit support to franchise projects, explores the use of project expected income for pledge loans, and supports the use of related income as a source of repayment. Article 24 stipulates that securities financing for franchise projects is supported, and equity participation in the form of establishing industrial funds is encouraged to provide capital for franchise projects. Franchise projects are also encouraged to establish private equity funds, introduce strategic investors, and issue corporate bonds, project revenue bonds, Expand financing channels through corporate bonds, non-financial enterprise bond financing instruments and other means. These financing support policies are a refinement and summary of the relevant policies of the relevant departments of the State Council. When we communicated with the People's Bank of China, the China Banking Regulatory Commission and other departments, they all attached great importance to and supported it and hoped that measures related to financing support would be reflected and solidified in the "Measures". Third, strengthen government investment support. In order to give full play to the guiding and driving role of government investment in "four ounces of investment", Article 25 of the "Measures" stipulates that relevant departments of the people's government at or above the county level may explore the establishment of guidance funds for infrastructure and public utility franchises with financial institutions, and provide investment subsidies, financial Various methods such as subsidies and loan interest discounts are used to support the construction and operation of relevant franchise projects.
China Tendering Weekly:
What impact will the introduction of the "Measures" have on China's financial reform? What role will this "Measures" play in alleviating the financing difficulties of small and medium-sized enterprises after it is promulgated? Thank you
Li Pumin:
In order to alleviate the current problems of difficult and expensive financing for small and medium-sized enterprises, especially small and micro enterprises, the state has adopted a series of measures. I think that by promulgating this "Measures", funds from all aspects can be mobilized to participate in the construction of infrastructure and public utilities. This is not only the work of the government, but also the whole society, especially some enterprises. The promulgation of this "Measures" will play a certain role in improving the problem of funding difficulties for small and medium-sized enterprises, especially small and micro enterprises. Thanks.
China Business News:
The state has repeatedly emphasized the need to transform government functions and optimize the administrative approval process in encouraging social investment. I would like to ask about the process of implementing franchising. Will new administrative approval items be added? Thanks.
Li Kang:
In the process of our research and demonstration, including cooperating with relevant departments to release, market entities are concerned about the many issues involving franchise projects, long approval periods, and cumbersome procedures. The response was very strong. We conducted a survey last year, and a water company reported that a certain sewage treatment franchise project lasted a year and a half, with more than 160 stamps, before construction was finally started. These administrative approvals constitute the so-called "glass door", which affects the entry of private investment. In order to reduce the burden on franchisees, ensure that projects are implemented as soon as possible, and at the same time promote the transformation of government functions, the "Measures" grasp a very important starting point and foothold, that is, there will be no new administrative approval procedures or approval links for market entities. And made important institutional innovations.
The "Measures" specifically emphasize that administrative approvals cannot be illegally increased in the name of implementing franchising, and at the same time further simplify and optimize the approval process, and strictly control the approval process. There are three main aspects: First, improve departmental coordination by strengthening departmental coordination. Together. Franchising involves many laws and regulations, as well as the approval responsibilities of many departments. Therefore, the "Measures" make an important innovation and emphasize the establishment of a coordination mechanism. The review of franchise projects must rely on the department coordination mechanism to accelerate the implementation of the project. Article 8 stipulates that local governments shall establish a coordination mechanism for the franchise department with the participation of various departments, be responsible for coordinating relevant policies and measures, and organize and coordinate the implementation, supervision and management of franchise projects.
Article 13 stipulates that the project proposing department shall rely on the department coordination mechanism established by the people's government at the same level and conduct a joint review of the implementation plan with other departments. All departments are very supportive and cooperative in this regard. The second is to avoid repeated reviews by simplifying review content. For those who need to handle planning site selection, land use and project approval procedures in accordance with the law, Article 22 of the "Measures" specifically stipulates that relevant departments should simplify the review content, optimize the handling process, and shorten the handling time limit. For matters for which the department has issued written review opinions , no more repeated reviews. The third is to prohibit new administrative approvals through strict legal control. Article 42 clearly stipulates that people's governments at or above the county level and their relevant departments shall supervise and manage franchise operations in accordance with laws, administrative regulations and administrative approval items decided by the State Council, and shall not illegally add administrative approval items or add administrative approval items in the name of implementing franchise operations. Approval stage. Thanks.
China News Agency:
I would like to ask, infrastructure and public utilities are related to the vital interests of the broad masses of the people. With the development of franchising in the future, if it is said that they are all provided by the society If capital is used for construction and operation, how to ensure that the quality and efficiency of these public services and products will not decline, and how to ensure that the public interests and public safety are not damaged? Thanks.
Li Kang:
This is a very real problem, and it has indeed appeared in the process of local promotion. After the implementation of franchising, funds came in, and investment, management, management, and operation were all completed by social capital. Some governments unloaded the burden. As time went by, public interests were not protected, and The problem of declining public service quality has even triggered some mass incidents. What needs to be emphasized is that franchising does not completely place the obligation to provide public services on the market and enterprises, just like unburdening the government. The fundamental purpose of franchising is to use the cooperation between the government and social capital to show their strengths. , *** provide high-quality and efficient public services to society, market entities, and the public.
Therefore, while ensuring that franchisees obtain reasonable returns, the "Measures" also stipulates measures to safeguard public interests from four aspects: First, clarify the implementation conditions. Articles 9 and 10 set out requirements for the standards proposed for franchise projects, stipulating that relevant departments should comply with relevant plans when proposing projects, the construction and operation standards and supervision requirements should be clear, and the integrity and continuity of the projects should be ensured. The project implementation plan should also include basic economic and technical indicators, calculation of investment return, feasibility analysis and other basic contents. Articles 11 and 12 stipulate the feasibility assessment of franchise operations and introduce a third-party assessment mechanism. This is a very specific and essential step. Attracting private investment is not simply to say that you can enter this field and you can compete, but to regulate what the government should do from the perspective of limiting the government's public power, how to implement franchising, and what methods and procedures should be adopted for which projects and fields. Start a franchise.
Second, strengthen administrative supervision. Article 41 of the "Measures" stipulates administrative supervision methods such as industry supervision, cost supervision and audit supervision. Article 43 stipulates that the government shall, in accordance with the franchise agreement, regularly conduct monitoring, analysis and performance evaluation of the construction and operation of franchise projects to ensure the quality and efficiency of public services and public products.
Third, strengthen social supervision. Article 43 stipulates that the implementing agency shall regard the opinions of the public as an important part of monitoring analysis and performance evaluation. Article 44 of the "Measures" stipulates the public's right to supervise, complain and put forward opinions and suggestions. Article 45 stipulates corresponding information disclosure obligations for the government and franchisees respectively. The government shall promptly disclose franchise-related policies, measures, supervision mechanisms, etc., and the implementing agencies and franchisees shall provide information on the entire process of the franchise project, including providing Construction and operation standards, regular monitoring and analysis, performance evaluation, financial accounting, etc. are disclosed to the public. Sunshine is the best preservative, and the same is true in the field of franchising. I think it is a very powerful measure to disclose all government information related to franchising, including franchisees' investment, construction and operation information, to the society in accordance with the law. Conducive to timely supervision by the public.
Fourth, improve the guarantee mechanism. Article 46 stipulates the obligation of franchisees to provide fair services generally and without discrimination. Articles 40, 48, and 52 stipulate measures to ensure the stable and continuous provision of public products or public services under special circumstances. When there is a dispute between the two parties to the agreement, neither the government nor the franchisee can affect the public's normal access to public products or public services. Article 47 also stipulates emergency plan guarantees in the event of emergencies.
In short, franchising is an important innovation in the mechanism for providing public products and services. The role and responsibilities of the government as a regulator and public service guaranteeer always exist. We are in " In the Measures, relevant systems and mechanisms are further improved to ensure the continuous and stable supply of public services and safeguard public interests and public safety. Thanks.