Jiangsu Steps Up Scrutiny of Public-Private Partnerships

Via caixinglobal.com

Jiangsu province is stepping up regulation of public-private partnerships (PPPs) to stop them from becoming another financing platform for local governments to secretly rack up more debt.

The province, the first to heed a recent Ministry of Finance (MOF) warning of a buildup of “hidden risks” in such deals, issued sweeping new rules in an effort to stamp out abuses of the system.

The ministry has ordered all ventures that adopt the PPP model, under which private companies invest in government infrastructure projects, to register in a provincial system to have their project awarded a PPP classification. It has banned local governments from promising in any way to buy back the equity of private investors, or to compensate private investors for losses on their investment capital.

 

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