overviewofpppinchinaswatersupply,wastewaterand.docVIP

Overview of PPP in China’s Water Supply, Wastewater and Solid Waste Sectors Trémolet Consulting and Unirule Institute of Economics, in association with: China Center for Public-Private Partnerships (CCPPP) Jensen-Blanc-Brude Ltd Pinsent Masons Shanghai Jumbo Consulting Co., Ltd. May 2006 Table of Contents Table of Contents 2 1. Introduction 3 1.1 Report objectives 3 1.2 Report structure 3 2. Overview of Water Supply, Wastewater and Solid Waste Sectors 5 2.1 Water Supply 5 2.2 Wastewater 7 2.3 Solid Waste 9 3. Regulation of Water Supply, Wastewater and Solid Waste 12 3.1 Overall Legal and Institutional Framework 12 3.2 Laws, Regulations and Policies for PPP in public urban utilities 20 4. PPP activity in Water Supply, Wastewater and Solid Waste 32 This section reviews recent trends in PPP activity in the three sectors and examines key PPP models that have emerged on the Chinese market as well as financing conditions. 32 4.1 PPP trends in China’s municipal public utilities 32 4.2 PPP Models in Water Supply, Wastewater and Solid Waste Treatment 36 4.3 Sources of Financing for PPP 44 5. Drivers and Obstacles for PPP 47 5.1. Drivers for PPP 47 5.2. Major Issues Preventing the Development of PPP Model 48 6. Conclusions and Suggestions 51 Annex A – Key References 52 Introduction Report objectives This report was commissioned by KfW Entwicklungsbank (Development Bank), the lending arm for the Financial Development Cooperation of the German Government and the Chinese Ministry of Finance to provide a review of Public Private Partnerships (PPP) in the water supply, wastewater and solid waste sectors in the People’s Republic of China. It is to provide a background for the design of PPPs in the ongoing Sino-German Programs for the provision of sustainable urban infrastructure and a seminar on the same topic to be held in Beijing on 25th-26th June. The seminar, to be held under the auspices of the Ministry of Finance and the Ministry of Construction, will gath