Research On The Urban Utilities Franchise In China

The rapid development of China’s economy,the improvement of urbanization level and the increasing of the urban population, cause some pressure to the development of urban public utilities. Government as the builder and operator of urban public utilities business can not adapt to the new the environment. Accelerate the process of marketization of urban public utilities is not only the way to speed up the development of urban public utilities, but also an important measure to improve China’s socialist market economic system. Because franchise plays a positive role in the urban public utilities field, franchising is gradually adopted by governments around the world. The reason is that the use of urban public utilities franchising, on the one hand can ease the financial strain of the Government, on the other hand can introduce private capital into urban public utilities field, broaden the investment channels for private capital and improve private corporations investment initiative.Since 1984, Shajiao Power Plant Phase Ⅱ project of Guangdong Province used franchise, the history about using of urban public utilities franchising has been 30 years. Many of our urban public utilities franchising projects achieved positive results and many cities utilities are timely and successfully built. The continuity and stability of the urban public utilities’s products and services can be guaranteed. But along with the application of urban public utilities franchise, some questions related to franchise come along such as the insufficient competition in the bidding link of the franchise,asset deal of the franchising corporations, government credit problems and so on. In order to take the advantage of the franchise in the field of urban public utilities and promote the urban public utilities development healthily and smoothly, government departments and the business corporations must work together and properly solve problems encountered in the practice of franchising process.This paper firstly describes the background and significance of the franchise. Review the current research through the literature and clarify the framework and structure of the paper. Secondly, from the producing of the franchise,this paper analyzes the realistic foundation and theoretical basis of the franchise and describes the specific operational processes of the franchise. Thirdly, paper introduce the history of France, Britain, Spain about the urban public utilities franchise, draw on their experience and learn their lessons based on the actual situation.Finally paper propose measures and policies for solving the problems of franchise in China.