2021-09-19

Xinhua News Agency: Ministry of Finance of China Released the Operational Guidelines for Performance Management of PPP Projects

(20-MAY-2020)


Xinhua News Agency, Beijing, March 31st (Reporter Shen Cheng) - The reporter learned from the Ministry of Finance of China on the 31st that in order to regulate the whole life cycle performance management of Public Private Partnership (PPP) projects, the Ministry of Finance has recently issued the Operational Guidelines for Performance Management of PPP Projects, aiming to improve the quality and efficiency of public service supply and protect the legitimate rights and interests of all parties.

 

Performance management of PPP projects refers to project management activities including the management of performance targets and indicators, performance monitoring, evaluation and result application carried out throughout the full life cycle of PPP projects. The operational guidelines issued this time are applicable to all PPP projects, including government paid, viability gap funding projects and user-pay projects.

 

According to the Operational Guidelines, the implementation agency of the project is responsible for preparing the performance targets and indicators of the PPP project, which will be submitted to the competent departments of the relevant sectors and financial department for review. Performance targets of PPP project include overall performance goals and annual performance goals. The overall performance goal is the expected output and effect of the PPP project throughout the full life cycle; the annual performance goal refers to the expected annual output and effect expected to be achieved in a specific year based on the overall performance targets and the actual situation of the project, which should be specific, measurable, and achievable.

 

The Operational Guidelines definite that the project implementation agency should carry out PPP project performance monitoring on a regular basis according to the project contract, and the project company (social capital) is responsible for daily performance monitoring. PPP project performance monitoring is the tracking, monitoring and management of the daily operation of the project and the achievements of annual performance targets, which usually include the milestones of target achievement, the guarantee measures of the targets, target deviations and rectification of the goals.

 

The Operating Guidelines state that financial departments at all levels should work close with relevant departments to establish and improve relevant systems and common indicator frameworks for performance management of PPP projects, and effectively conduct project compliance reviews. Financial departments at all levels should also carefully review the financial revenue and expenditure budget applications and performance goals and indicator systems of PPP projects, rationally arrange the financial budget, and strengthen the supervision of the compliance and effectiveness of the use of financial funds; carry out performance re-evaluation of selected major PPP projects, in consideration of work priorities of the year.


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