Polaris Environmental Network News: Recently, the Ministry of Finance's implementation of the government and social capital cooperation norms of development. The full text is as follows:
Implementation Opinions of the Ministry of Finance on Promoting the Development of Government and Social Capital Cooperation
Finance [2019] No. 10
The provinces, autonomous regions, municipalities directly under the Central Government, the municipal finance bureaus (bureaus), the Xinjiang Production and Construction Corps Finance Bureau, the Ministry of Finance in the provinces, autonomous regions, municipalities directly under the Central Government, and the municipal financial ombudsman offices:
Promoting the use of government and social capital cooperation (PPP) models in the public service sector, introducing social forces to participate in public service provision, and improving supply quality and efficiency is a major decision-making arrangement made by the Party Central Committee and the State Council. In order to implement the spirit of the Central Economic Work Conference and the National Financial Work Conference, effectively prevent and control the hidden debt risks of local governments, give full play to the positive role of the PPP model, implement the “six stable†work requirements, fill in the shortcomings of infrastructure, and promote high economic Quality development, the following comments are made:
First, firmly grasp the overall requirements for promoting the development of PPP specifications
In recent years, the financial departments at all levels have worked with relevant parties to vigorously promote PPP work, and have played an active role in stabilizing growth, promoting reform, and benefiting people's livelihood. However, there are also problems beyond their own financial resources, curing government expenditure responsibilities, and generalization of application. The financial departments at all levels should further raise their awareness and follow the principles of “standard operation, strict supervision, openness and transparency, and integrity and complianceâ€, effectively prevent and control the hidden debt risks of local governments, resolutely fight against major risks, and promote the development of PPP standards. .
(1) Standard operation. Improve the system, clarify the list of “positive and negativeâ€, clarify the requirements of the whole life cycle management, strictly administer the project, improve the dynamic adjustment mechanism of “can enter and exitâ€, and implement the project performance incentive assessment.
(2) Strict supervision. Adhere to the principle of necessary and affordable financial input, prudent scientific decision-making, improve fiscal expenditure responsibility monitoring and risk early warning mechanism, prevent excessive government expenditure responsibilities, excessively increase the pressure on fiscal expenditure, and effectively prevent and control the implicit use of local governments in the name of PPP. debt.
(3) Open and transparent. Fair, just, open and preferential procurement of social capital. Make good use of the national PPP comprehensive information platform, fully disclose the full life cycle information of PPP projects, protect the public's right to know, and form effective supervision and restraint on all parties involved.
(4) Honest performance. Strengthen the local government's integrity construction, enhance the concept of contract, fully embody the principle of equal cooperation, and protect the legitimate rights and interests of social capital. In accordance with the law, the financial expenditure responsibilities of eligible PPP projects will be included in the budget management, and performance will be implemented in time according to the contract, so as to enhance the long-term investment confidence of social capital.
Second, standardize the implementation of PPP project implementation
(1) The standardized PPP project shall meet the following conditions:
1. Public welfare projects belonging to the public service sector. The term of cooperation is in principle more than 10 years, and the procedures for value-for-money evaluation and financial affordability are performed in accordance with the regulations;
2. Social capital is responsible for project investment, construction, operation and corresponding risks, and the government bears risks such as policies and laws;
3. Establish a payment mechanism that is fully linked to the output performance of the project. It is not allowed to lock in and solidify the government expenditure responsibility in advance by reducing the assessment criteria;
4. The project capital is in line with the state's prescribed ratio, and the shareholders of the project company pay their capital in full and on time with their own funds;
5. The signing party of the government shall be the people's government at or above the county level or its authorized agency or institution;
6. Incorporate into the national PPP comprehensive information platform project library according to regulations, fully disclose project information in a timely manner, and actively accept social supervision.
(2) At the same time as meeting the above conditions, the new government-paid items should also meet the following prudential requirements in principle:
1. In areas where fiscal expenditures account for more than 5% of the total, no government-paid items may be added. In accordance with the principle of “substance is more important than formâ€, except for PPP projects that are managed in accordance with the two lines of revenue and expenditure and in the form of government payment;
2. Select social capital parties in a competitive manner such as open tendering, invitation to tender, competitive negotiation, and competitive negotiation;
3. Strictly control project investment, construction and operation costs, and strengthen follow-up audit.
In order to circumvent the above restrictions, the new government-paid items will be bundled and packaged into a small number of user-paid items. If the content of the project is not substantially related and the user's payment ratio is less than 10%, it will not be placed in the warehouse.
(3) Strengthening the supervision of fiscal expenditure responsibility. Ensure that the financial expenditures of all PPP projects at this level from the general public budget are not more than 10% of the general public budget expenditures of the current year. New contracted projects may not arrange PPP project operation subsidies from government fund budgets and state-owned capital operating budgets. Establish an early warning mechanism for expenditure responsibility of PPP projects, and carry out risk warnings for areas with fiscal expenditures exceeding 7%, and prohibit new projects from being placed in more than 10% of the regions.
Third, strengthen project standard management
The financial departments at all levels shall put the standard operation in the first place and implement the standardized PPP projects in strict accordance with the requirements. The following actions shall not occur:
(1) There is a government-side or government-funded representative who repurchases the investment capital to social capital, promises a fixed return or guarantees the lowest return. By signing a yin and yang contract, or by the government or the government to provide representatives with various forms of guarantees, repayment commitments, etc., the government actually invests in the project to build operational risks.
(2) State-owned enterprises that have various types of financing platform companies and financing platform companies affiliated to the government at the same level and that can substantially affect their business activities participate in the PPP projects of this level as social capital. The social capital party actually only undertakes project construction, does not undertake project operation responsibility, or decouples government expenditure items from project output performance.
(3) Choosing a social capital party without legal procedures. Failure to comply with the provisions of the value-for-money evaluation, financial ability to demonstrate or evade the financial capacity of 10% red line, in the name of PPP.
(4) Debt funds are used as project capital, and false capital contribution or capital contribution is not true.
(5) Failure to fully disclose project information or disclose false project information in a timely manner, which seriously affects the exercise of the public's right to know and the right to social supervision.
For the case of the existence of item (1) of this article, the warehousing project shall be retired, and the financial expenditure responsibility formed by the project shall be recognized as the implicit debt of the local government, and the relevant departments shall be required to be seriously accountable to the relevant units and individuals according to the regulations.
For the case of the existence of items (2) to (5) of this article, the rectification shall be carried out within the time limit. If it is unable to rectify or overdue rectification is not in place, the warehousing project shall be retired. If it involves increasing the implicit debt of the local government, it shall be submitted to the relevant departments for accountability and proper disposal according to the regulations.
Fourth, create a good environment for standardized development
The financial departments at all levels should, in conjunction with relevant departments, take measures to strengthen standardized management and classified guidance, and increase policy support for key areas and key projects.
(1) Encourage the participation of private capital and foreign capital. We will increase support for private enterprises and foreign-invested enterprises to participate in PPP projects, and introduce high-quality projects with good government credit and stable project returns to private enterprises, and give preferential support to private enterprises in participating projects under the same conditions. The relevant special transfer payment funds in the central public service sector will give priority to supporting PPP projects involving qualified private enterprises. Study and improve the performance appraisal method of China's PPP fund, and invest private enterprises to participate in the project as an important assessment indicator to guide China's PPP fund to increase support. When conducting PPP projects in various places, it is forbidden to set up discriminatory clauses or additional conditions for foreign-funded enterprises and Chinese-funded overseas branches. To promote high-quality and high-quality purchases, we should reasonably select procurement methods according to the characteristics of procurement projects, further strengthen procurement requirements and performance acceptance management, and improve procurement quality.
(2) Increase financing support. In line with its own financial situation, it is necessary to adopt a method of injecting capital and operating subsidies to support standardized PPP projects. Guide insurance funds, China PPP funds to increase project equity investment, and broaden the source of project capital. Encourage the revitalization of project stock assets through equity transfer, asset trading, asset securitization, etc., and enrich social capital entry and exit channels.
(3) Focus on key areas. Priority is given to supporting infrastructure supplements and public welfare projects with certain benefits in the areas of equalization of basic public services such as health, pension, culture, sports, and tourism. Accelerate the implementation of projects that meet the needs of economic and social development, complete decision-making procedures, clear reporting mechanisms, and reasonable financing structures.
(4) Guarantee reasonable expenses. The government expenditures formed by qualified PPP projects are based on the public's enjoyment of public services that meet the agreed conditions, and are the recurrent expenditures generated by the government to provide operating subsidies for the public to enjoy public services. All localities must, in accordance with the law, incorporate the fiscal expenditures of standardized PPP projects into budget management, and promise to keep promises and stabilize market expectations.
(5) Strengthening information disclosure. Relying on the national PPP comprehensive information platform, the PPP project information will be publicly disclosed, summarized, statistically analyzed and monitored, and the dynamic adjustment mechanism of the project library “can enter and exit†will be improved, and the project will not be “endorsed†for project compliance. The warehousing is used as a commercial bank loan condition.
(6) Strengthen the classification guidance. For projects under construction, urge all parties to strictly implement the contract, ensure that the capital contribution is in place, and promote the project to be completed on time, avoiding the “half pull†project. For projects that have not yet started, the parties are urged to strengthen the review of contract terms and standardize financing arrangements in strict accordance with the requirements. For projects entering the procurement phase, strengthen publicity and promotion and information disclosure, and attract all market participants, especially private enterprises and foreign-funded enterprises to participate on an equal footing. At the same time, strengthen the reserve of major projects, do a good job in the preliminary demonstration of the project, and promote the formation of a project development pattern of near-integration and cascade.
(7) Strengthening the management of PPP consulting institutions and expert libraries. Consultation institutions and experts should play a professional role, abide by professional ethics, and provide PPP project consulting services in accordance with laws and regulations. For organizations and experts who fail to standardize PPP projects to increase hidden debt risks, issue advisory opinions in violation of relevant policies and regulations, deviate from reasonable market standards, and have negative impacts on PPP projects, and serious consequences, they must be held accountable according to the regulations.
V. Collaboration and cooperation
The financial departments at all levels should improve their positions and take the initiative to accelerate the establishment of a working mechanism that is coordinated, safeguarded, and measures are in place.
(1) Strengthen departmental collaboration, strengthen communication and coordination and information sharing in the early stages of project identification, demonstration and warehousing, solidly prepare the project in advance, consolidate the project implementation basis, and promote scientific decision-making.
(2) Strengthening tracking and monitoring. Strengthen the follow-up guidance, supervision and inspection of the project life cycle, and establish and improve the policy implementation and project implementation supervision mechanism. Increase the intensity of information disclosure, take the initiative to accept audit supervision and social supervision, and promote the orderly implementation of project specifications.
(3) Encourage local and local departments to adapt their work mechanisms to local conditions, increase policy support, strengthen experience summarization and case promotion, and experience problems and major problems discovered during work promotion, and report to the Ministry of Finance in a timely manner.
Ministry of Finance
March 7, 2019
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