The construction and management of Beijing's
infrastructure is expected to open the door to overseas or domestic
private-owned companies, according to the Beijing Municipal Development and
Reform Commission.
For domestic and foreign investors to know more about the new policy, the
commission opened a website about investment in Beijing.
The Special Permission to Beijing Municipal Infrastructure Management policy
has been adopted by the municipal government.
Infrastructure includes supply of water, gas and heat, treatment of waste and
public transportation for local residents.
A large sum of money will be saved for the government when the reform is
implemented. The infrastructure is also expected to be upgraded, according to
local officials.
But for Beijing, urban rail transit, though fast, efficient and
pollution-free, would be a heavy strain on the city's limited budgets.
Therefore, instead of depending on financing from local governments, the city is
looking for funds from other channels.
Compared with Shanghai and Guangzhou, Beijing's subway is comparatively
backward, and its ticket prices are too low to earn money. For this reason, the
subway company still loses money even though the subway has been operated for
more than 20 years.
Before 2008, when the city will host the Olympic Games, Beijing is expected
to finish 10 subway lines. Facing huge demand for investment, local government
has decided to raise money through the special construction funding.
It was announced earlier this month that Beijing will issue 2 billion yuan
(US$240 million) in bonds next year to help finance its No 4 and 10 subway
lines, the total cost of which is expected to hit 30.1 billion yuan (US$3.6
billion).
The construction of the two subways will start next month.
"I believe that over US$10 billion can be saved by the local government,"
said Ding Xiangyang, an official of Beijing Municipal Development and Reform
Commission.
According to the commission, build-operate-transfer (BOT) and
transfer-operate-transfer (TOT) will be adopted. It means when the contract
expires, the investors must stop the operation and management of infrastructure
programmes, and transfer them to the local government.