Beijing issues investment regulation
( 2003-09-11 09:36) (China Daily)
The Beijing municipal government yesterday issued a new regulation to further encourage private and foreign investment in its infrastructure.
The Regulation on Chartered Operations of Beijing Urban Infrastructure Facilities will take effect on October 1.
Liu Zhihua, vice-mayor of the capital city, announced the news yesterday at the investment fair Promotion of Key Projects and Urban Development of Beijing.
"The regulation is aimed at making full use of private and overseas capital to make up for inadequate fiscal investment," said Liu.
Zhou Jidong, director of the Beijing municipal government's law office, indicated that the government drew on the experience of developed nations.
The operational model will not only reduce operating costs for infrastructure facilities but also help enhance service quality.
According to the regulation, private and foreign funding will be allowed to conduct chartered operations in infrastructure facilities, including water, gas and heating supplies, sewage treatment and solid waste disposal. Also included is public transport, such as expressways, subway lines, the light rail system and bus routes.
"The government will follow open, just and fair principles," said Zhou. Public bidding and auctions will be adopted to guarantee transparency.
"The investors can decide how to invest their money from three choices," said Zhou.
The possible forms of investment are build-operate-transfer (BOT), transfer-operate-transfer (TOT) and chartered operations of public services.
The regulation also sets out clear and strict rules on the duties and rights of the government and investors.
Zhou said: "The government should guarantee that investors can make a profit through the charging of fees, tax subsidies or property operations in accordance with the agreements."
The government should compensate investors if any policy revisions substantially affect their operations or if the government has to limit chartered operation rights before the due date or if it takes over infrastructure facilities in the public interest.
The government will act as supervisor over the operators of infrastructure facilities.
Experts and insiders say the rules could protect both investors' interests and the public interest, standardize the chartered operation market and make it easier to invest.
At yesterday's promotional fair, the municipal government presented 50 infrastructure projects to Chinese and foreign enterprises. The projects were concentrated in sewage treatment, expressways, metro line construction and water supplies.
The combined investment for the 50 projects exceeds 60 billion yuan (US$7.23 billion)
Chai Xiaozhong, member of the Beijing Development Planning Committee, said that the 50 projects were the most urgent and well-prepared ones.
"To make Beijing into an international metropolitan city and meet the requirements of the 2008 Olympic Games, a series of infrastructure projects will be promoted soon," said Chai.
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