A Case Research About The PPP Application Of Chizhou Water Treatment Projects

The China economy is undertaking a shift from high speed of growth towards “the new normal state” marked by moderate speed of growth.The new concept of development,namely “innovation,coordination,greenness,openness,and sharing”,has rapidly replaced the traditional economic development pattern of high energy consumption and intensive pollution.The target of green development,known as “to keep clean mountains and rivers in sight”,imposes higher standards on the emission,collection and treatment of residential and industrial waste water.It has become a critical challenge for local governments to increase the inputs for waste water treatment infrastructure,to improve supplemental facilities,to build up a professional operation and maintenance system,to combine existing resources,and to maximize the utility of the infrastructure.However,the available public finance resources are still far from enough to meet up with the demand for more waste water treatment facilities,given the fact that China is still on the preliminary development stage of socialism.In such case,it is of urgent importance to explore diversified funding sources,to design a suitable model of construction and syndication,and to break through the bottleneck of professional involvement in operation and maintenance.To solve the above mentioned problems,the thesis takes the Chizhou waste water treatment project,which is in execution,as an example.Through the analysis on the finance,construction and operation patterns of the project,the thesis looks into the impact of PPP model on the following aspects: whether it can effectively incorporate social resources to strengthen the inputs for infrastructure and public services,and whether it can enforce the government to break through the barrier stereotype to allow for participation of professional players to improve the efficiency of infrastructure construction and operation in a market-oriented manner.On the one hand,the thesis reveals the shortage of funding,the lack of waste water treatment facilities and pipelines,as well as the poor operational status of the existing facilities.On the other hand,the thesis makes well rounded analysis on the application of PPP model in Chizhou waste water treatment project from the perspectives of private participant selection,the operation model,the return structure and the risk management consideration.According to the in-depth research,the market-oriented PPP model applied by Chizhou Government has been proven effective.In the model,the ownership and operational right of waste water treatment facilities and pipelines within certain period is transferred to social capital with professional capacity(Shenzhen Water Management Company,“SWMC”)in maintenance and operation,and SWMC takes on full responsibility to operate and improve the facilities and services.The PPP model is in accordance with the requirements proposed by the18 th CPC National Congress to “maximize the fundamental impact of market in resource allocation”.And at the meantime,the model successfully addresses the problems such as insufficient waste water treatment facilities,barriers in management structure,lack of operational experience,and shortage of maintenance funding.The practice in Chizhou sets up a good example for other local governments in China to broaden the funding sources and improve the operational efficiency of waste water treatment projects.