Study On Legal Supervision Over PPP Based Public Rental Housing Projects

The PPP mode (Public-Private-Partnership) originated in Britain in the 1930s. And after decades of years the PPP mode has become popular in public infrastructure projects around the world. The PPP mode is regarded as a win-win example of cooperation between the government and social capital for it not only helps government to reduce financial burden, but also improves the efficiency of social capital. It’s a new try to apply PPP mode in Public rental housing projects that need a large sum of money, which has become the best practice of most countries in the world. In China, many kinds of PPP mode such as BT mode, BOT mode, and BOO mode have been applied into public rental housing projects, and some successful results have been achieved. However, many problems still hedge such practice, with deficient legal supervision as the most common one. As a result, poor construction quality, funds shortage and ambiguous rights and responsibility, or even venture projects arise in the practice, which not only damage government’s image and reputation, but also pullback social capital’s flowing in. Therefore, it is impending to tighten Legal Supervision over PPP financed Public rental housing projects.Bearing this in mind, we shall define its coverage first. PPP based Public rental housing projects involves many participants and complex contract system. It is more difficult to exercise legal supervision with the new body. Therefore, we need to clarify and balance all participants, and establish an independent regulator to strengthen constraints on government behavior Thus to encourage more social capital into Public rental housing projects.In a traditional government oriented legal supervision mode, government acts as a manager and it emphasis government input more than social capital, result more than process, efficiency more than supervision, which result in weak supervision with in sufficient regulations, unified regulator and unclear responsibilities. While in PPP mode, government and social capital acts under equal cooperation, which also requires certain adjustments in legal regulations. Therefore, we need to establishment of independent regulators from the legal perspective, only this can promote PPP based public rental housing project, so as to safeguard people’s legal rights and benefits and advance harmonious society process.The following aspects should be taken into consideration in improving legal supervision.1. Improve the legislative status by adding more items on supervision; 2. establish an independent regulator, namely PPP regulation center (affiliates to financial department and is equal to existing PPP center), which is responsible to supervision around the country with local PPP groups; 3.establish a comprehensive and multilateral model with explicit content on market access, interest distribution, withdrawal mechanism, price、quality and finance supervision, so as to safeguard the progress of PPP based public rental housing projects; 4. Improve mechanism to ignite legal supervision and innovate its methods so as to share information with all departments through internet; 5. Improve Economic law, Administrative law and Civil law, so as to support legal basis to settle disputes; 6. Establish other legal regulation means, such as information query platform, appropriate incentive policy, and give play to the role of public supervision.In a word, the existing legal supervision concept and model can not meet the demands of PPP based public rental housing projects. It is most important to establish an independent third party regulator by improving legislation. Thus any participant can be justified fairly if default behaviors happen. Furthermore, more necessary incentive policy shall be applied to regulate and guide more social capital into these projects.