Development of public infrastructure, which serves as a basis for improving lifestyle quality and boosting economic growth, can be disrupted by public resource limitations. Government cooperation with the private sector via public-private partnerships (PPP), which allows for the joint completion of public infrastructure and provision of services, has therefore become a global trend and a key area of discussion among members of the Asia-Pacific Economic Cooperation (APEC). PPP has been included in the goal and strategy of administration by Executive Yuan and Ministry of Finance to provide sustainable and quality public service for the public.
There are numerous laws governing private participation in infrastructure projects, including the Act for Promotion of Private Participation in Infrastructure Projects (PPIP Act), Statute for Encouragement of Private Participation in Transportation Infrastructure Projects, Mass Rapid Transit Act, National Property Act, Local Government Public Property Administration Act, Commercial Port Law, and Electricity Act.
The government and private sector each has its own strengths. Through public-private partnerships, the two sides can balance risks associated with design, construction, size and legal changes. Additionally, through private capital, operational efficiency, and management skills, implementation of major infrastructure projects can proceed more smoothly. Since PPP projects possess of long-term, stable profits, private enterprises will view asset allocation as a major consideration. Participants can therefore apply for tax and land acquisition incentives offered under the PPIP Act to increase profit margins, expand business scope and improve their image.
Act for Promotion of Private Participation in Infrastructure Projects was promulgated by President of the Republic of China on February 9, 2000, with the Ministry of Finance as the competent authority. Amendments were promulgated on December 30, 2015. Related laws, operating manuals, and references have been established to ensure the fairness, justice, and publicity of standard operating procedures for private participation in infrastructure projects. With the supervision of operating performances, the Ministry of Finance may continue to promote private participation in infrastructure projects based on a same ground. The Ministry will continue to offer platforms for PPP projects investment while assisting with cross-departmental cooperation and legal issues, in order to clear investment roadblocks.
- Transportation Facilities
- Common Conduits
- Environmental Pollution Prevention Facilities
- Sewerage
- Water Supply Facilities
- Water Conservancy Facilities
- Sanitation and Medical Facilities
- Social Welfare Facilities
- Labor Welfare Facilities
- Cultural and Educational Facilities
- Tourist Attractions and Lodgings
- Power Facilities
- Public Gas and Fuel Supply Facilities
- Sports Facilities
- Parks and Green Spaces
- Industrial Facilities
- Commercial Facilities
- Hi-tech Facilities
- Development of New Towns
- Agricultural Facilities
- Government Office Buildings
The Methods of Participation in an Infrastructure Project
BOT
Build-Operate-Transfer
The private institution invests in the building and operation of the infrastructure project, and upon expiration of the operation period, transfers the ownership to the government.
BTO
Build-Transfer-Operate
The private institution invests in the building of the infrastructure project and upon completion of the building, transfers the ownership to the government with or without compensation. The government then commissions the operation of the infrastructure project to the same private institution. Upon expiration of the operation period, the right to operate reverts back to the government.
ROT
Rehabilitate-Operate-Transfer
The private institution invests in the extension, reconstruction and/or repair of an existing infrastructure, and operates the infrastructure. Upon expiration of the operation period, the right to operate reverts to the government.
OT
Operate-Transfer
The private institution operates an infrastructure built with investment from the government. Upon expiration of the operation period, the right to operate reverts to the government.
BOO
Build-Own-Operate
To support the national policy, the private institution invests in the construction of an infrastructure on private land provided by the private institution itself, has the ownership thereof upon completion of the construction, and then operates the infrastructure itself or commissions a third party to operate it.
Other
Other
Other methods approved by the competent authority.