China has become the largest PPP market in the world. According to the latest data of the Ministry of finance, there are 13554 national warehousing projects, with a total investment of 16.3 trillion yuan. The vigorous development of PPP market attracts the world's attention, but various problems emerge in an endless stream.
Recently, a high-speed PPP project in Sichuan was terminated due to financing difficulties, in which Chengdu Road and bridge, the social capital party, undertook 5 million liquidated damages. The event caused widespread concern in the industry and caused extensive discussion in the PPP headline community. PPP mode emphasizes the principle of benefit sharing and risk sharing between government and enterprises. This project is a wake-up call to social capital and local government.
8.2 billion project termination
In the evening of August 8, Chengdu Road and Bridge released a notice on the progress of Yiwei expressway project, which shows that the company and its wholly-owned subsidiary Sichuan Yiwei Expressway Co., Ltd. received the notice on rescinding the investment agreement of Yiwei expressway project and the notice on rescinding the concession agreement of Yiwei expressway project from Yibin municipal government on the same day.
According to the above notice, the company no longer has the right to invest in the construction of Yiwei expressway project, nor the franchise right of Yiwei expressway project; no longer has the right to invest, construct, operate and maintain the project; the performance guarantee paid by Chengdu Road and bridge is now RMB 5 million, which will not be refunded according to the contract; after the relevant agreement of Yiwei project is terminated, the company will not undertake other projects Take legal responsibility. Chengdu Road and Bridge said that the company agreed to accept the terms of the above notice and terminate the relevant agreement signed with Yibin Municipal People's government. According to the reasons for the termination of the major project, Chengdu Road and Bridge said that it was mainly caused by the difficulties in project financing.
According to the director of the investment system and Policy Research Office of the Macroeconomic Research Institute of the national development and Reform Commission, there are two main reasons for the unsuccessful financing of the project. From the perspective of the government, the preliminary feasibility study and project implementation stage have not been fully discussed and studied with the financial institutions, and have not been recognized by the bank; "the project itself has poor financing, and the bidder is in the quotation stage It is possible that the financing conditions have not been negotiated with the relevant financial institutions and have not been recognized by the financial institutions. "
Alarm for government and social capital
In fact, Chengdu Road and bridge is not intended to give up the promotion of the project. In February this year, Chengdu Road and Bridge held an extraordinary general meeting of shareholders to deliberate on the proposal, which is intended to provide a guarantee of up to 6 billion yuan for the foreign financing of the wholly-owned subsidiary Sichuan Yiwei Expressway Co., Ltd. The proposal has also been deliberated and approved by the general meeting of shareholders, but after the case of the general meeting of shareholders, it was ruled by the court not to be implemented temporarily. From the signing of the contract in 2014 to now, after three years, the local government can't afford it, so this year, the agreement was directly terminated.
At present, China is vigorously promoting PPP mode, with hundreds of billions of projects pushed by all regions, and some social capital boldly take projects without considering their own strength, but they can't do it many times, which is one of the reasons for the low landing rate of PPP projects.
According to Ye Jitao, a PPP double database expert from the Ministry of finance of the national development and Reform Commission and chairman of Shanghai Hongkun Business Consulting Co., Ltd., Chengdu Road and Bridge 8.2 billion PPP project was terminated due to financing difficulties, which sounded a warning to the industry. "In the future, the government should strengthen the punishment for the breach of contract due to the lack of financing, strengthen the investigation on the background, strength, ability and reputation of social capital, and do not sign agreements blindly. Social capital should not take projects blindly. It should have a reasonable financing plan (after fully docking with banks and other institutions) and necessary internal decision-making process before investing in projects, so as to benefit people and self-interest. "
Due to the huge volume of PPP projects, according to the current requirement of 20% capital ratio, a 10 billion project requires at least 2 billion capital, which is largely based on financing, and some social capital eager to take projects will not consider so much. If social capital can't be financed in time, the project can't be started in time, and there will be no win-win cooperation in PPP mode.
Zhang Jifeng, a PPP double database expert from the Ministry of finance of the national development and Reform Commission and partner of Beijing Yuntian Xinfeng investment management center, said that the project can't be done after the social capital has negotiated with the government, and the financing work must move forward to the stage of project contact and negotiation. "Without the participation of financing institutions in project negotiation and scheme design, project preparation is incomplete."
Jin Yongxiang, general manager of Dayue consulting, said that social capital should negotiate financing agreements with financial institutions at the same time when negotiating project agreements with the government. Only when the conditions of financing agreements are settled can social capital formally sign the project agreements, so that the financing agreements can be signed immediately after signing the project agreements. "The problem reflected by the incident is that the social capital side only talks about contracts with the government and ignores the contract with the bank. As a result, the former signed the contract, but the financing was not completed. The government side took seriously the social capital side's breach of contract after that."