Gov't monopoly over 700-plus road, water, energy sectors ends ( 2003-09-25 01:11) (China Daily)
A long list of multi-billion
dollar urban infrastructure projects, previously monopolized by the government,
are now open to all investors, the Ministry of Construction revealed yesterday.
The list includes more than 700 projects covering urban road construction,
water supply, gas and heating systems and waste treatment in most medium and
large cities nationwide. About 150 billion yuan (US$18 billion) is to be
earmarked for the projects.
Li Dongxu, department head of the ministry, made the list public at a
three-day workshop on urban infrastructure and market forces, which started
yesterday in Beijing.
Mao Yushi, renowned economist with Beijing-based Unirule Economic Research
Institute, said the announcement was a milestone, signalling the Chinese
Government's determination to open its market further.
At the workshop, vice-minister of construction Qiu Baoxin called on domestic
and overseas investors to become more involved in the construction and
management of urban infrastructure. The sector is expected to boom as the growth
in China's urbanization accelerates.
China has undergone a rapid urbanization in recent years, with 37.7 per cent
of its population living in cities and towns by the end of 2002, 7 percentage
points higher than in 1998. China has 662 cities and 20,358 towns, with a total
urban population of 481 million. And during the next 20 years, its towns and
cities are expected to grow by around 1.5 per cent a year. "China's future
urbanization requires a market-orientated approach and all businesses are now
free to invest in the former government monopoly of urban public
infrastructure,'' said Qiu.
These sectors, such as urban road construction, water supply, gas and heating
systems and waste treatment, are currently operated mainly by state-owned
enterprises.
"With regard to non-profitable sectors, such as environmental protection and
sanitation, we are going to organize a bidding process to attract better-suited
operators,'' said Qiu.
Qiu's ministry, which is responsible for planning China's urbanization, and
city and town construction and management, has been involved in the opening up
of urban infrastructure since last year.
Li Dongxu told China Daily yesterday that his ministry is busy drafting
various reforms in China's urban infrastructure construction and management.
"Many practices, based on the old planned economy, are becoming barriers to
cities' further development,'' said Li.
He said State-owned enterprises "are inefficient and some local governments
cannot invest enough to keep up with the fast urbanization process.''
Li said his ministry is co-operating with domestic and foreign financiers to
secure investment in China's cities and towns.
More than 100 financial, banking and investment groups from home and abroad
attended yesterday's workshop.
Domestic financial businesses said they would provide loans to competitive
investors and fund infrastructure projects such as water supply, drainage
systems, recycled water and waste treatment and efficient energy use.
Earlier this year, the ministry and the Agricultural Bank of China entered
into a 30 billion yuan (US$3.6 billion) agreement to speed up the development of
infrastructure in urban areas.
China's urbanization has also attracted investment from international
financial organizations such as the World Bank and the Asian Development Bank.
