Beijing's Urban Infrastructure Franchising Approach

Original Language Title: 北京市城市基础设施特许经营办法

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(August 19, 2003 Executive session of the 12th Beijing Municipal People's Government on August 28, 2003, Beijing Municipal People's Government announced the 134th) first in order to promote the process of marketization of urban infrastructure construction and operation in the city, and expand financing channel, speeding up urban infrastructure construction, providing quality public goods and services, maintain the legitimate rights and interests of investors, franchisees and customers, this approach is formulated.
    Second article this approach by said City based facilities franchise, is refers to by administrative special license, enterprise or other organization in must term and range within business following city based facilities: (a) water, and gas, and heating, and drainage; (ii) sewage and solid waste processing; (three) charges Highway, and Metro, and city railway and other city public traffic; (four) other city based facilities.
    Third article City based facilities franchise can take following way: (a) in must term within, will project grant franchise who investment construction, and operation, term expires free transfer; (ii) in must term within, will City based facilities transfer franchise who operation, term expires free transfer; (three) in must term within, will public service delegate franchise who provides; (four) City Government agreed of other way.
    Fourth People's Republic of China inside and outside the enterprise can be equal in accordance with these measures and others compete, obtained concessions for urban infrastructure in the city.
    Concessions shall follow the principle of openness, justice and fairness.
    Article fifth franchise of urban infrastructure projects (hereinafter licence), according to the city's urban construction and development needs and urban infrastructure construction plan.
    Specific projects by infrastructure, development and reform, in conjunction with city departments and other departments concerned, approval of the municipal people's Government to determine.
    After the sixth concession projects, urban infrastructure, industry authorities should formulate an implementation programme, organized by the municipal development and reform Department of financial, pricing, planning, land and housing, construction, environmental protection and other relevant administrative departments, in accordance with their respective responsibilities for the implementation of programme review revised and submitted to the municipal people's Government for approval.
    Implementation programme should including following content: (a) project name; (ii) project basic economic technology index; (three) location and other planning conditions; (four) Chartered term; (five) investment returns, and price and measuring; (six) operators should has of conditions and the select way; (seven) other government commitment; (eight) guarantees measures; (nine) Chartered right using fee and relief; (10) is responsible for implementation of units.
    Article seventh franchise could return in the following ways: (a) charges for providing public goods and services, (ii) and urban infrastructure related to the development and operation of other interests, (iii) enjoy subsidies from the Government; (d) the municipality agree otherwise.
    Eighth Government commitment can be involved with concession projects related to land use, infrastructure, preventing unnecessary repetitive projects, necessary for subsidies, but do not undertake business risk-sharing, the fixed return on investment and other items prohibited by laws or regulations. Nineth made concession, shall pay royalties.
    Royalty standards determined by the municipal people's Government according to the characteristics of the concession project, for profit or enjoy subsidies of concession projects can reduce royalties.
    Article tenth franchise after the project and implementation plan approved by the municipal people's Government, the municipal development and reform Department or trade authorities issued recommendations for urban infrastructure project announcements.
    11th concession project by the city infrastructure Department or district or county or municipal government other sectors identified (hereinafter referred to as implementation units) for implementation.
    Implementation of the duties of the unit: (a) is responsible for the preparation of tender documents, organizations tendering; (b) the franchise agreements and negotiations with the winning bidder, and (iii) agreed in the concession agreement committed to support implementation of the project work and (iv) supervision and licensing agreements have been implemented (v) urban infrastructure to receive transfer of licence expires. 12th concession operators should be established through public bidding.
    Existing urban infrastructure provisions of article III of these measures to be taken by way of franchising operations, approved by the municipal people's Government, can also take the form of direct grants concessions and infrastructure sectors by the city authorities signed a concession agreement with the franchise.
    13th concession project establishment and adjustment of prices of products and services, in accordance with the provisions of the price law enforcement. Determined the 14th franchise, franchise agreements implementation units should work with franchisees. Chartered agreement including following content: (a) project name, and content; (ii) franchise way, and term; (three) products or service of number, and quality and standard; (four) voted financing term and way; (five) charges or subsidies and adjustment mechanism; (six) Government of commitment and guarantees; (seven) franchise who of right and obligations; (eight) Chartered period within of risk share; (nine) Chartered expires project transfer of way, and program; (10) default responsibility; (11) dispute
    15th after signing the concession agreement, Charter operators should be incorporated within the period specified by the project company, responsible for the implementation of the concession project.
    16th in the concession project, and relevant competent administrative departments shall, in accordance with their respective mandates, in accordance with the provisions of programme for implementing units and the project company to provide the appropriate services.
    17th over the concession period, the project company shall, in accordance with the licence agreement the contract without a break, providing public products and services, the franchise of urban infrastructure maintenance, ensure the good functioning of the facility.
    Article 18th within the duration of the concession, on the competent authorities to check on the concession projects, assessments, audits, Charter operators in violation of the law, statutes, regulations and licensing agreement should be rectified and punished according to law, concession recovery according to law.
    Article 19th concession period for policy adjustment on the interests expected by the project company, the project company may appeal to the competent departments of city infrastructure applications for compensation are received by the competent departments of city infrastructure project company within 6 months after the claim investigation, approved by the municipal people's Government to pay appropriate compensation.
    Article 20th concession shall not be transferable.
    Article 21st project company under any of the following circumstances, implementing units have the right to terminate the licence agreement: (I) is not agreed in the concession agreement providing public goods or services, if the circumstances are serious, (ii) the assignment of the concession, (iii) unauthorized business, business impact of public interest and public safety; (d) the bankruptcy caused the licence agreement of the project company is unable to perform.
    22nd over the concession period, except in the case provided in article 21st of this approach, the concession may not recover, urban infrastructure the franchise shall not be expropriated; however, due to public interest, approved by the municipal people's Government to withdraw concessions franchise of city infrastructure or expropriation, compensation should be given. Article 23rd expiry of the concession period, the project company can apply for an extension of the duration of the concession.
    Applications for extension of the duration of the concession shall, on the expiry of the concession 1 ex-Industry Department in charge of urban infrastructure, agreed by the urban infrastructure departments review and report to the municipal people's Government for approval, can be extended.
    Article 24th of the concession was withdrawn, the project company shall, according to the concession agreement or the transfer of municipal urban infrastructure, implementation units should be organized to assess the facility and related assets in need of compensation, according to the concession agreement, the Parties shall be compensated.
    25th relevant administrative authorities in violation of the rules, does not fulfil the statutory duties and interfere with the normal operation of the project company activities, deception, abuse of, the project company the right to report and complaint, you can also apply for administrative reconsideration or bring an administrative suit.
                                                                                            26th article of the rules take effect on October 1, 2003.