Regulations of Beijing Municipality on Concession for Urban Infrastructure

• Document Number：Announcement No. 42 of the Standing Committee of the People's Congress of Beijing Municipality
• Area of Law： Construction Industry
• Level of Authority： Provincial Local Regulations
• Date issued：12-01-2005
• Effective Date：03-01-2006
• Status： Effective
• Issuing Authority： Beijing Municipal People's Congress (incl. Standing Committee)

Announcement of the Standing Committee of the People's Congress of Beijing Municipality
(No. 42)
The Regulations of Beijing Municipality on Concession for Urban Infrastructure, at the 24th Meeting of the Standing Committee of the 12th People's Congress of Beijing Municipality on December 1, 2005, is hereby promulgated and shall come into effect on March 1, 2006.
Standing Committee of the 12th Municipal People's Congress of Beijing
December 1, 2005
Regulations of Beijing Municipality on Concession for Urban Infrastructure
(Adopted at the 24th Meeting of the Standing Committee of the 12th People's Congress of Beijing Municipality on December 1, 2005)
Contents
Chapter I General Provisions
Chapter II Granting of Concession Rights
Chapter III Rights and Obligations
Chapter IV Supervision and Administration
Chapter V Legal Liability
Chapter VI Supplementary Provisions
Chapter I General Provisions
Article 1 These Regulations are formulated in accordance with relevant laws and regulations for the purposes of standardizing the concession for urban infrastructures management, expanding the financing channels, ensuring the public interests and public security, guaranteeing the quality of public goods and services and protecting the legitimate rights and interests of concessionaires.
Article 2 The term “concession for urban infrastructure” in these Regulations means the concession of the enterprises and other economic organizations within or outside the territory of the People's Republic of China granted, according to law, by the government to manage urban infrastructure within a certain period and scope and provide public goods or public services.
Article 3 These Regulations are applicable to concession for urban infrastructure in this Municipality.
The following urban infrastructure may be subject to concession:
(1) water supply, gas supply or heating;
(2) disposal of sewage and solid wastes;
(3) urban rail transportation and other public communications; or
(4) other urban infrastructure fixed by the Municipal People's Government.
Article 4 The following forms may be taken in the concession for urban infrastructure:
(1) within a certain period of time, the urban infrastructure is financed, constructed and operated by a concessionaire, and transferred to the government without compensation upon expiration of such period;
(2) within a certain period of time, the urban infrastructure is handed over by the government to a concessionaire to operate and transferred back to the government without compensation upon expiration of such period; or
(3) other forms consented by the Municipal People's Government.
Article 5 The principles of fairness, good faith and priority of public interests shall be followed in granting concession for urban infrastructure management.
Article 6 The municipal development and reform department shall be responsible for the overall planning, comprehensive balance, coordination and supervision of concession for urban infrastructure management in this Municipality.
The competent industrial departments of urban infrastructure at the municipal level, the district or county people's governments and the departments designated by the municipal, or the district or county people's governments (hereinafter referred to as implementation agencies) shall be responsible for the specific implementation and the supervision and administration of urban infrastructure projects in this Municipality.
The relevant administrative departments of planning, land resources, construction, environmental protection, finance, auditing, supervision, etc. shall perform their functions and duties of supervision and administration according to law within their respective functions and duties.
Chapter II Granting of Concession Rights
Article 7 The urban infrastructure projects subject to concession may be proposed by the municipal development and reform department, the competent industrial departments of urban infrastructure at the municipal level or the district or county people's governments.
Article 8 The urban infrastructure projects subject to concession shall conform to the economic and social development plan, the overall urban planning, the industrial development plans of urban infrastructure and the needs of urban development of this Municipality.
The municipal development and reform department shall determine the urban infrastructure projects subject to concession at the municipal level. The major projects shall be reported to the Municipal People's Government for approval.
The district or county governments shall determine the urban infrastructure projects subject to concession in their own districts or counties within their authorities of examining and approving fixed asset investment projects.
Article 9 After the urban infrastructure projects subject to concession are determined, the implementation agencies shall work out the implementation plans.
The implementation plans of urban infrastructure projects subject to concession shall include the following contents:
(1) the names of projects;
(2) the implementation agencies of projects;
(3) the conditions the concessionaires shall possess and the methods for choosing the concessionaires;
(4) the basic economic and technical index of projects;
(5) the sites chosen and other planning conditions;
(6) the clauses of concession rights and the concession period;
(7) the investment return and prices evaluated;
(8) the concessionary royalties and the reduction or exemption thereof;
(9) the security measures; and
(10) other government commitments.
Article 10 The municipal development and reform department shall organize the relevant municipal administrative departments of planning, land resources, construction, environmental protection, finance, etc. to examine the implementation plans of urban infrastructure subject to concession at the municipal level according to their respective functions and duties and the relevant administrative departments shall write out their examination and approval opinions respectively. The municipal development and reform department together with the implementation agencies shall report the revised and finalized implementation plans to the Municipal People's Government for approval.
The implementation plans of urban infrastructure subject to concession in districts or counties shall be determined by the district or county people's governments.
Professionals shall be organized to conduct the feasibility study of the implementation plans for major urban infrastructure projects subject to concession.
Article 11 The implementation agencies shall, in accordance with the implementation plans, determine the concessionaires by bid invitation or other fair competition methods and sign the concession agreements with them.
Article 12 A concession agreement shall include the following contents:
(1) the name and contents of the project;
(2) the ways, areas, scopes and period of concession;
(3) whether to establish the project company, and the business scope and registered capital of the project company, the ways and proportion of shareholders' contribution, the transfer of stock ownership, etc.;
(4) the quantity, quality and standard of products or services;
(5) the period and means of investment and financing;
(6) the forms of investment return and the determination and adjustment mechanism thereof;
(7) the concessionary royalty and the reduction or exemption thereof;
(8) the rights and obligations of the concessionaire;
(9) the performance guarantee;
(10) the risk-sharing within the concession period;
(11) the commitments and security given by the government;
(12) the emergency plans;
(13) the ways and procedures for transferring the project upon expiration of the concession period;
(14) the breach of contract;
(15) the ways of dispute settlement; or
(16) other matters that need to be agreed upon.
The contents of a concession agreement shall conform to its implementation plan of urban infrastructure subject to concession.
Article 13 The concession period agreed on in a concession agreement shall be determined based on such factors as the industrial characteristics, the operation scale and the ways of operation, but the maximum period shall not exceed 30 years.
Article 14 Where it is necessary to establish a project company according to the concession agreement, the concessionaire shall, within the prescribed time period, establish and register a project company, acknowledged by the implementation agency, to bear the concessionaire's rights and obligations.
A concession agreement may, upon agreement, restrict the alteration of stock ownership of the project company.
Article 15 A concession agreement may stipulated that the concessionaire may get the return in the following ways:
(1) charging on the public products or services provided;
(2) the government granting other development and management rights and interests related to urban infrastructure;
(3) the government giving the corresponding subsidies; or
(4) other ways consented by the Municipal People's Government.
Article 16 As to the small profit-making or financial subsidy-enjoying projects, the concession agreements may provide for the reduction or exemption of the concessionary royalties.
Article 17 In the concession agreements, the government commitments may involve the land use, the provision of related infrastructure and the prevention of unnecessary repeated competitive project construction related to the concessionary projects, necessary and reasonable subsidies and government procurement of goods and services, but the governments may not make commitments of sharing the commercial risks, the fixed return rate of investment and other matters prohibited by laws and regulations.
Article 18 After a concession agreement is concluded, the concessionaire shall, with the concession agreement and other relevant documents, go to the relevant competent administrative department to handle the relevant procedures.
When handling the procedures related to concession, the relevant competent administrative department shall not repeatedly examine the contents on which the opinions of examination and approval have been given; and the examination results of other contents shall not lead to the substantial changes of the contents of the concession agreement.
Chapter III Rights and Obligations
Article 19 The implementation agencies shall fulfill their relevant obligations in accordance with the concession agreements.
The relevant administrative departments shall fulfill the relevant government commitments in the concession agreements according to their respective functions and duties.
The concessionaires shall, in accordance with the concession agreements, provide safe and qualified products as well as high quality, consistent and effective services.
Article 20 The concessionaires shall widely and indiscriminatingly provide public goods or services according to the plans within the service areas prescribed in the concession agreements.
The concessionaires shall not charge connection fees such as the compensation fee of facility investment for the new users' connection with the facilities of water supply, gas supply, heating and sewage disposal subject to concession.
Article 21 Where the implementation agencies take over the urban infrastructure in accordance with the decisions of the municipal and the district or county people's governments or the provisions in the concession agreements, the concessionaires shall fulfill the duty of guard with good faith and maintain the normal business and service before completion of the take-over.
Article 22 One year before the concession period expires, the concessionaire may apply to the implementation agency for extension of the period. After the implementation agency organizes an appraisal and report the matter to the government at the same level for approval, the period may be extended.
Article 23 The concessionaires shall implement the government price or government guidance price set by the competent price department when providing public goods or services.
Article 24 The concessionaires shall pay the concessionary royalty as agreed in the concession agreements.
Article 25 The concessionaires shall not transfer, rent, pledge, mortgage or dispose of the concession rights and the assets under concession in other ways without the consent of the implementation agencies.
Within the concession period, the concessionaires shall not use the facilities subject to concession and the land concerned for other purposes than the projects subject to concession.
Article 26 The concessionaries shall repair, maintain, renew and upgrade the urban infrastructure regularly, ensure it in good operation and report its operation to the implementation agencies.
Article 27 The concessionaries shall collect, classify, sort out and file the relevant materials in the process of construction, operation, repair and maintenance of the urban infrastructure and transfer them completely to the implementation agencies in conformity with the ways, procedures and period prescribed in the agreements.
Article 28 The concessionaires shall timely and completely file the annual operation reports, annual financial reports and reports of other important matters to the implementation agencies for the record.
Article 29 The implementation agencies and their working staff shall have the obligation to safeguard the confidentiality of the concessionaires' commercial secrets and technological secrets acquired in carrying out concession-related activities and relevant supervision and administration.
Article 30 Where the policy adjustments do harm to the benefits expected by concessionaries', the governments shall make corresponding compensation.
Article 31 Within the concession period, either party of a concession agreement shall not alter or dissolve the original agreement arbitrarily. When one party thinks it necessary to alter or dissolve the agreement, it shall consult with the other party. Upon agreement through consultation, an agreement may be altered or dissolved; where an agreement can not be reached and a dispute is caused, the dispute may be resolved according to the way of dispute settlement prescribed in the agreement.
Article 32 No units or individuals may, in violation of laws, regulations and the provisions of these Regulations, call back or restrict the concessionaires' concession rights.
The governments may call back the concession rights, terminate the concession agreements, expropriate the urban infrastructure subject to concession or designate the concessionaires to provide public goods or services really due to public interests, but the corresponding compensation shall be made according to the stipulations in the concession agreements.
Article 33 Where the concessionaires think that the specific administrative behaviors of the municipal and the district or county people's governments as well as their relevant competent administrative departments infringe upon their legitimate rights and interests, they shall have the right to explain or defend themselves and apply for administrative reconsideration or bring administrative lawsuits according to law.
Article 34 The implementation agencies and the concessionaires shall work out emergency plans to ensure the normal operation of urban infrastructure to the maximum extent in the case of sudden natural disasters, wars, accidents, and such public affairs as public sanitation and public security.
Chapter IV Supervision and Administration
Article 35 Within the concession period, the relevant competent administrative departments shall examine, assess and audit the projects subject to concession according to their respective functions and duties, and correct and deal with the concessionaires' violation of laws, regulations or rules according to law.
Article 36 The implementation agencies shall establish and save the files of the urban infrastructure projects subject to concession.
The implementation agencies shall timely monitor and analyze the implementation of urban infrastructure projects subject to concession, and together with relevant departments, organize the professional institutions to carry out comprehensive assessments on the implementation of urban infrastructure projects subject to concession regularly. Generally, the assessment period shall not be less than two years, and an annual assessment may be carried out where necessary.
Monitoring and assessing shall not hinder the normal business activities of the concessionary projects.
Article 37 The competent price departments shall follow the principle of compensating cost, receiving reasonable proceeds, saving resources and adapting to social bearability in determining the government price or government guidance price relating to concessionary projects. The expenses that have nothing to do with the products or services concerned with concession shall not be counted into the operating cost of concession.
Article 38 The competent price departments shall establish a regular price examination system and set up a cost database to carry out effective supervision and administration of product and service prices.
Article 39 The concessionaires shall timely make public the quality, technical standards and other information related to public interests and public security of the urban infrastructure projects subject to concession.
Chapter V Legal Liability
Article 40 A concessionaire, falling into one of the following circumstances, shall be ordered to make corrections by the implementation agency; where it refuses to make such corrections, the agency may call back the concession right, terminate the concession agreement, and carry out the temporary take-over:
(i) the circumstances of violating the provisions of laws or regulations or the stipulations in the concession agreement are serious;
(ii) failure to fulfill the obligations of repairing, maintaining, renewing and upgrading leading to endangering the public interests and public security;
(iii) transferring, renting, pledging, mortgaging or disposing of the concession rights and the assets under concession in other ways without authorization;
(iv) stopping or suspending business without authorization; or
(v) other circumstances provided by laws and regulations or prescribed in the concession agreement.
Article 41 Where the concession right is acquired by frauds or bribery, the implementation agency shall revoke the concession right and terminate the concession agreement.
The enterprise or other economic organization whose concession right is revoked shall not participate in the competition for the concession of urban infrastructure within this Municipality within three years.
Article 42 Where the relevant competent administrative departments and their working staff, in violation of the provisions of these Regulations, fail to perform their statutory duties and responsibilities, interfere with the concessionaires' normal business activities, engage in illegalities by fraudulent means or for private benefits, or abuse their powers, the relevant responsible person shall be investigated for administrative responsibility by the supervision departments; where a crime is constituted, criminal liability shall be investigated for according to law.
Chapter VI Supplementary Provisions
Article 43 These Regulations shall be effective as of March 1st, 2006. The Measures of Beijing Municipality for Concession for Urban Infrastructure Management promulgated on August 28, 2003 shall be repealed simultaneously.