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UK advising China on PFI

The UK has sent officials to China to give advice on how to involve the private sector in building infrastructure including schools and hospitals, the Financial Times said24 Jun 2015

China has asked the UK Treasury for advice on using private sector finance, according to the paper.

"China, in common with numerous other countries, recognises our commercial expertise in public-private partnerships," the Treasury told the Financial Times. "We have worked closely with key decision makers there to share our knowledge, further developing economic ties between the two countries and helping to open up new markets for British business.".

In May, China's National Development and Reform Commission (NDRC) said it was seeking partners for 1,043 public private partnership projects in 29 regions. The NDRC's website gave a list of the projects, broken down by region (link in Chinese).

Many local governments have also announced lists of PPP projects at the provincial level, some of which are not included in the NDRC's list, construction expert Helena Chen of Pinsent Masons, the law firm behind said. Hunan province announced a list of 30 PPP projects and will announce a second list in the near future, she said.

"In addition, several local governments have also announced incentives to solicit PPP investors," Chen said. "For example, in December 2014 the People's Government of Hunan province announced 'management rules' on providing performance bonus and interest subsidy for qualified PPP projects in the fields of water supply, gas supply, water treatment and waste treatment. To be qualified to receive an interest subsidy, the PPP projects have to be procured in accordance with the PPP operation guidelines announced by the Ministry of Finance."

The Ministry of Finance has released two major PPP-related guidelines so far, Chen said: PPP operational guidelines and PPP contract guidelines.

"Although PPP contract guidelines are not expressly referred to in the management rules, it is highly likely that the principles in the PPP contract guidelines will play an important role in practice, especially in provinces where the provincial departments of finance take charge in planning PPP projects," Chen said. 

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