The Chinese Ministry of Finance (MOF) has made the unprecedented move of removing public-private partnerships (PPP) from its list of demonstration projects.
MOF has just issued the “Notice Concerning Further Strengthening Standardisation and Regulation of Private-Public Partnership Demonstration Projects” (关于进一步加强政府和社会资本合作（PPP）示范项目规范管理的通知) (Caijin [2018] No. 54), following the examination and processing of 173 demonstration projects involving a total investment sum of 670.3 billion yuan.
30 projects have been withdrawn from the demonstration project list as well the National PPP Integrated Information Platform Project Library (全国PPP综合信息平台项目库), while another 54 have been removed from the demonstration project list, yet retained within the library.
The 30 projects that have been withdrawn from both the demonstration list and the project library involve a total investment sum of approximately 30 billion yuan, with a common reason being failure to continue to adopt the PPP model or failure to actually implement.
Cheng Xu (程旭), a manager with the Xinjiang office of CICOC (中国投资咨询有限责任公司), said to National Business Daily that this is the first time that demonstration PPP projects have been cut, signalling the government’s determination to ensure the quality of projects that come to fruition.
According to figures from the MOF PPP Center, a total of four sets of PPP demonstration projects, have been approved, consisting of 1009 projects for a total investment sum of 2.3 trillion yuan.
The demonstration projects are intended to foster the standardised implementation of PPP’s in China, and provide examples of implementation that can be reproduced on a broad scale.
In addition to the 84 PPP removed from the demonstration project list, another 89 projects worth total investment of approximately 481.8 billion yuan have been ordered to correct problems including lack of a standardised model, slovenly procurement processes, and defects involving signatories by the end of June, or face removal from both the demonstration project list and the project library.
Beijing-based PPP big-data consultancy Bridata estimates that a total of 2407 projects had been cleared from the project library as of the start of April, worth an investment sum of approximately 2.39 trillion yuan.
In November last year the Ministry of Finance issued the “Notice Concerning Standardisation of Public-Private Partnership Integrated Information Platform Project Library Management” (关于规范政府和社会资本合作（PPP）综合信息平台项目库管理的通知) (Circular No. 92), which mandated a “clean-up” of the PPP project library by local governments by the end of March 2018.
Circular 92 called for the “concentrated clean-up of projects that have already entered the project library and are subject to circumstances including lack of suitability for the continued adoption of the PPP model for implementation; failure to satisfy standardised business requirements, illicit or illegal debt-raising guarantees, or failure to make information public in accordance with regulations.”
According to the Circular any such PPP projects should be cancelled and removed from the government’s library of projects.
