Research On Legal Issues Of Management Of Government Credit Risks In Public-Private Partnerships Projects

Since the Third Plenary Session of the 18 th Central Committee of the Communist Party of China,accumulated investments in Public-Private Partnerships projects has been rising up,but the widespread degradation of signature rate for the contract makes us worry.Apparently,PPP hasn’t brought us the economic and social benefits we expect for the reason of local government credit risks.This paper firstly focused on the legal nature of PPP contracts and viewed it as the special civil contracts instead of government contracts,so the legal nature of government credit risks is civil default with eight concrete forms,including breach availability-based payment duty,breach supporting funds duty,equity investment defect,rejection of risk guarantee,uniqueness risk,policy change risk,poor coordination risk and leadership transition risk.Secondly,I summarized the successful experience of three countries including UK,Australia and Canada in PPP.Thirdly,based on the general objective for the management of government credit risks,I suggest we could manage the government risks through the contractual methods,administrative methods and judicial supervision.Contractual methods refer to standardisation of contracts,risk guarantee,assurance funds,structured investment,counterargument right,credit default swap.Administrative methods refer to VFM and financial capacity assessment,superior financial withholding and administrative accountability.Besides,institutional construction is also important,such as accelerating PPP legislation with co-governance thought,establishing public scrutiny mechanism,establishing national PPP credit information system and improving the state compensation.Lastly,only if combine the three methods with institutional construction,we could solve the problems of government credit risks ultimately.