Recently, the "Guiding Opinions on Standardizing the Implementation of New Mechanisms for Cooperation between Government and Social Capital" was officially released. The guidance proposes that the government and social capital cooperation (PPP) will focus on user paid projects, adopt a franchise model, reasonably grasp key areas, and prioritize the participation of private enterprises. Industry experts believe that the new mechanism will be conducive to the standardized development and sunshine operation of PPP, and provide important opportunities for the development of private enterprises, which will effectively boost their confidence. PPP will focus on user paid projects and adopt a franchising model for all guidance requirements. Government and social capital cooperation projects should focus on user paid projects, clarify the charging channels and methods, and ensure that project operating income can cover construction investment and operating costs, with a certain investment return, without adding additional local financial future expenditure responsibilities due to the adoption of the government and social capital cooperation model. The government can provide government investment support to user paid projects during the project construction period on the principle of equal treatment, while strictly preventing the addition of implicit local government debts and complying with laws, regulations, and relevant policy requirements; The government can only subsidize operations according to regulations and cannot subsidize construction costs. In addition, financial funds shall not be used to cover project construction and operating costs through any means such as feasibility gap subsidies, promised minimum return rates, and availability payments. The guidance clearly states that all cooperation between the government and social capital should adopt a franchise model for implementation. Water works, highways, and other projects are all user paid projects, "said Wang Shouqing, the chief expert of the Investment and Financing Policy Research Center at Tsinghua University. Essentially, the franchise model is a specific model of PPP, with the main feature being user paid, but it does not exclude government subsidies during the operation period. Yang Yongheng, Director of the Investment and Financing Policy Research Center at Tsinghua University, stated that from the perspective of stabilizing investment, the new PPP mechanism helps to stabilize market expectations, enhance private capital confidence, and thus expand effective investment; From the perspective of risk prevention, the new PPP mechanism can significantly reduce the dependence of PPP projects on local financial resources, which is conducive to the formation of a stable return mechanism for PPP projects and can significantly reduce the risk of local government debt; From the perspective of efficiency enhancement, the new PPP mechanism returns to the "original intention" of franchising, focusing on user paid projects. By introducing the technological, management, and innovation advantages of private enterprises, it can significantly improve the quality and level of public goods and services supply. There is a natural symbiotic relationship between franchising and user payment. The user payment mechanism can effectively prevent financial funds from entering construction projects through feasibility gap subsidies, availability payments, and other methods, avoiding project alienation and generalization into government funded or government funded projects. "Mi Benjia, Deputy Director of the Chongqing Development and Reform Commission, said that the launch of the new PPP mechanism has timely responded to the concerns of various sectors of society, It strengthened the investment confidence of social capital, helped to steadily and orderly promote the construction of major projects, and effectively promoted the sustained growth of fixed assets investment. It is understood that in recent years, Chongqing has continued to deepen the standardized management of PPP, with a focus on actively attracting social capital through user payment, thereby driving the acceleration of infrastructure projects. In the eyes of private enterprises, participation
Edit：Hu Sen Ming Responsible editor：Li Xi
Source：XinhuaNet
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