Research On The Implementation Of Franchising Shanghai’s Stock Of Infrastructure Projects

Urban infrastructure is the foundation of the city’s development aswell as an important part of the city’s comprehensive competitiveness.With the continuous development of the economy and the society, urbanresident require more of the quality and the service level of theinfrastructure. Nowadays Shanghai has moved from the large-scale urbaninfrastructure construction phase into a new stage which is "constructionand management simultaneously, more management-oriented". Under thenew situation that the investment and financing environment hasundergone great changes, the study on how to innovative investment andfinancing modes while continuing to promote the new urbaninfrastructure, especially how to effectively revitalize the considerableaccumulated stock of infrastructure assets through franchising, is not onlya necessity required by development to improve the efficiency ofinfrastructure operation and management, and to enhance the level ofpublic services, but also a new breakthrough to accelerate the explorationof investment and financing reform, thus is of great significance for theconstruction of Shanghai international metropolis.This study of Shanghai stock urban infrastructure is based on thetheory of public goods and the theory of public-private partnerships (PPP),and gives a complete commentary on the definition and the characteristicsof infrastructure, urban infrastructure and stock urban infrastructure.Through the analysis of related theories, this paper discusses the necessityof this research from an academic angle. After a consultant of manyreferences is made, this paper selects and analyzes three typical cases,which are Macao Water, England Subway, and Changzhou ChengbeiSewage Treatment Plant, thus gets to the conclusion and gains someenlightenment for Shanghai. Meanwhile, Shanghai Chengtou Corporationis chosen as an example to illustrate the necessity and the feasibility offranchising Shanghai stock urban infrastructure. Through the evaluationand classification of existing stock of assets, this paper discusses thenecessity in four aspects as follows: it helps to improve the operational efficiency and service levels; it helps to revitalize the stock and promote avirtuous cycle of capital; it helps to straighten out the relationshipbetween government and enterprises and promote the transformation ofgovernment financing platform; it helps to improve the government’sindustry regulation and promote the reform of the industry. In thediscussion of feasibility, four aspects are presented: the existence of theprojects that are suitable for franchising among the stock infrastructureprojects, the current operators’ willingness to implement the franchise,the successful examples of franchising the stock infrastructure at homeand abroad, the existence of relevant laws and regulations as the basis. Tosolve the multifaceted problems existing in the current operating processof the stock infrastructure, this paper proposes a general idea and aninstitutional arrangement of the implementation of franchising Shanghaistock infrastructure. The general idea is to promote the process inaccordance with the " both breakthrough through the pilot and pushforward gradually, both design as a whole and discuss each issue as asingle, both distinguish different natures and implement withclassification, both develop standards and broaden access, both improvepolicies and make management innovation " principle. Follow theabove-mentioned idea and principle, this paper proposes the institutionalarrangement of franchising Shanghai stock urban infrastructure from fivedimensions as follows: to pay more attention to the assessment of theproject’s operational situation, to pay more attention to the design of thefranchising mode, to pay more attention to establish the value estimationof the project assets, to pay more attention to the takeover of the project,and to pay more attention to the proper franchise mode choosingaccording to the actual situation of the project. The TOT mode and theauthorized franchise mode are particularly analyzed and discussed. Thispaper sets Shanghai city water supply and drainage industry as anexample to explore and design the plan of revitalizing the stock assets,using the aforementioned ideas and methods.This paper collects detailed first-hand information through extensiveresearch, especially the in-depth research interviews with ShanghaiChengtou Corporation. Through research analysis, this paper is able tobuild the stock infrastructure franchising model, which is of greatsignificant and can provide a theoretical reference to the transformationof local government investment and financing platform and the modeinnovation of the investment and financing reform.