A Study On Price-Control In Public-Private Partnership Of Quasi-Public Utilities

When the regional governments respond the state policies to open the market of quasi-public utilities one after another, they are puzzled from the price-control of the product and service which is the most key problem in public-private partnership. The public characteristic of the quasi-public utilities requires realizing that public interests are maximized and consumer surplus is received to the highest degree. On the other hand, in order to realize the maximizing profit goal, the private enterprises must rely on the monopolizing position to make the monopoly price which will damage mass' interests. Because of the peculiar public quality and natural monopoly natures of quasi-public utilities, the price of their product can not be regulated by the market. So the government is required to offer price-control. Does the price-control of the government solve effectively the contradiction in the requirement of pricing between the public characteristic and private characteristic? Through analyzing three basic problems which are caused by the natural monopoly natures of quasi-public utilities with economics methods, the author draws the validity of price-control. The three basic problems are high price in monopoly, inefficient entering and price discrimination. By analyzing, the author tries to get the rational pricing theory which can realize that public interests are maximized and also can promote the operator's individual interests maximizing. During the practical application, the pricing mode should be chosen according to the concrete condition such as the trade characteristic, developing stage and the market. After confirming the pricing mode basically, the author analyze three effective operating forms in pricing combining China's objective current situation at present. The forms are the hearing, competing price in advance and getting involved afterwards. Then the author present the operating forms suitable for the present demand for development. So the theory of pricing in public-private partnership has been perfected on the system aspect and operation aspect. At last, the author presents the conditions that can optimize the pricing in public-private partnership of quasi-public utilities.