PPP opens a new chapter in environmental protection industry

        [China environmental protection online industry trends] PPP mode opens a new era of environmental protection industry. Among the published PPP projects, about 400 are environmental protection projects, accounting for more than 35%, which are the main areas of PPP project development. PPP projects have played a leading role in the environmental protection industry, with outstanding performance in the field of water affairs and relatively weak driving effect in the field of resource recycling.

        PPP policies have been accelerated to promote the emergence of a large number of projects and the layout of environmental protection fields.

        In the process of infrastructure construction and operation, the government's financial burden is facing serious challenges. In this context, the state strives to promote the application of public private partnership in infrastructure construction in China. In PPP mode, the government and the winning company form a franchise company, which is responsible for financing, construction and operation. The government provides financing guarantee to ensure that the franchise company gets loans and realize financing, benefit sharing and risk sharing between the enterprise and the government. In the process of PPP project implementation, the government provides financing guarantee, enterprises can get loans quickly, and the government also solves the investment problem. In addition, the government will change from a public service provider to a regulator, and hand over the construction and operation of the project to professional enterprises. It will pay more attention to the formulation and supervision of rules to ensure that the project will play an effective role.

        The introduction of policies accelerated to support the development of PPP projects. Since December 2014, a series of PPP regulatory documents have been issued successively, especially after 2015, the number of policy issues has increased. At present, the rule of law framework has been gradually formed, which has established a solid guarantee for the smooth promotion of PPP projects.

        National departments drive local governments and PPP projects emerge. On May 25, 2015, the national development and Reform Commission issued a total of 1043 PPP promotion projects, with a total investment of 1.97 trillion yuan. Local governments have issued local PPP projects, with total investment of more than 280 billion yuan in Zhejiang Province; Sichuan Province has issued a large number of PPP projects, reaching 264, with total investment of more than 250 billion yuan; Beijing has issued 136 PPP projects, with total investment of 260 billion yuan.

        Among the published PPP projects, about 400 are environmental protection projects, accounting for more than 35%, which are the main areas of PPP project development. In addition, the implementation opinions on promoting cooperation between government and social capital in the field of water pollution prevention and control issued on April 28, 2015 further promoted the development of PPP projects in the field of water pollution prevention and control in the environmental protection industry.

        PPP project ushers in a new era of environmental protection industry, with multi-point blooming in subdivisions.

        PPP mode opens a new era of environmental protection industry. The government financing guarantee guarantees that enterprises are more likely to obtain loans and enhance their financing ability. In addition, relevant departments and local PPP projects have set up multiple funds, such as guiding the approval of demonstration PPP fund, with a fund scale of about 50 billion yuan; Henan Province's 5 billion yuan PPP fund promotes the implementation of the project, which will provide sufficient financial support for enterprises, making PPP project no longer a hot potato for environmental protection enterprises, but a new profit growth point.

        The subdivisions of environmental protection have blossomed at many points, and the water industry has performed prominently. In terms of the number of PPP projects, there are many projects in the field of water affairs, accounting for nearly 70% of environmental protection projects; in terms of the investment in PPP projects, the total investment in the field of water affairs still accounts for more than 50%, and large-scale water enterprises reap a lot. For example, in the first half of 2015, eight PPP projects won the bid, with a total investment of nearly 7 billion yuan; the PPP order of Wan Bangda in hand has reached 8.6 billion yuan, and the water industry Overall development accelerated. PPP projects of resource recovery and utilization account for a relatively small proportion of the investment, which is 0.1%. In terms of the average investment of the project, the investment of a single project of comprehensive environmental management and ecological forest / park construction is relatively large, while the investment of a single PPP project in the field of water and waste treatment is relatively small. In the field of resource recovery and utilization, the investment amount of a single project is relatively low, which is 80 million yuan.

        Generally speaking, PPP projects have played a leading role in the environmental protection industry, with outstanding performance in the field of water affairs and relatively weak driving effect in the field of resource recycling.

        Investment reward mechanism, legal guarantee system and special fund are the important basis for the success of PPP project.

        We should establish a reasonable mechanism of return on investment. In PPP projects, the government aims to provide public goods and services, and enterprises aim to make profits. In the process of supervision, the government needs to strictly monitor the project quality. In terms of investment returns, for projects with weak profitability, the government should give subsidies to enterprises; for projects with strong profitability, it should give support. In this way, the quality of PPP projects and stable investment returns are attractive to social capital.

        Improve the legal security system. China's lack of laws to protect PPP projects leads to changes in the legality of the project and the effectiveness of the contract, resulting in adverse effects. We should appropriately expand the relevant provisions of the PPP project agreement, such as the principles of risk sharing and benefit sharing, information disclosure, performance evaluation, early termination arrangements, etc., and improve the legal protection system.

        Establish PPP special fund. PPP projects require high capital of enterprises and long return period of investment, which results in some enterprises with outstanding technology but relatively weak capital strength. The government and financial institutions can jointly contribute to the establishment of PPP fund, and select the main support projects, which can stimulate more enterprises to accumulate Ji and promote the development of PPP projects.