| Along with the development of Chinese economies and improvement of thepeople’s living standard, the current rail sector can no longer satisfy the demand. Thebudget of the government is too tight to build up the well functioning rail sectorwithout the help from private parties. Private-Public Partnership has gained itsimportance during the past decade and has been spread all over the world.PPP financing allow the private parties participate in the infrastructureconstruction and managing process, it can shorten the project life cycle as well asreduce the cost. It may also improve the quality and transfer certain kind of risks ofthe project. But at the same time, there is a lack of public control and decrease offlexibility. PPP project finance is widely used in the UK. London Underground hasgain its attention since the beginning of the project. But due to the failure inconsortium management, lack of control by the government and the uncomplicated ofthe contract, the project failed to carry out the expected results. China is using theexperience and lessons from the western world and trying to develop its own PPPprojects in rail sector. Beijing subway line4is a good example. So far, this project hasbeen run successfully.Comparative study and case study method have been used in writing this paper.Combine the advance experience gather by the western countries with the lesson thatcan be learnt from the failure of some projects, this paper try to give suggestions forthe future Chinese PPP projects. In order to carry out a successful project, thegovernment needs to acknowledge adequate information, take into consideration thepublic interest and keep a long-term perspective; the private party needs to choose thecontractor carefully and evaluate the risks properly. |
