Since the official launch of Public-Private Partnership (PPP) projects in 2014, both the number of projects and investment amounts have shifted from wild growth to a slowdown and return to rationality in recent years. The latest set of official data reveals the development of PPP over the past five years.

Recently, the PPP Center of the Ministry of Finance published the 2018 Annual Report of the National PPP Comprehensive Information Platform Project Management Database (hereinafter referred to as the Annual Report), which reflects the officially recognized status of PPP project development. By the end of 2018, the management database had accumulated 8,654 projects with a total investment of 13.2 trillion yuan.

Unlike previous years, in order to curb the disorderly development of PPP projects, the Ministry of Finance issued new regulations at the end of 2017 to standardize PPP projects. In early 2018, a storm of rectification and cleanup of PPP projects was launched, which rapidly cooled the red-hot PPP investment.

For the first time, the Annual Report published the results of last year's PPP cleanup and rectification: in 2018, a total of 2,557 projects were removed from the management database, involving an investment of 3 trillion yuan.

This directly led to a marked slowdown in the growth rate of projects entering the database last year compared with previous years. In March and April, both the number of projects entering the database and the investment amount showed clear negative growth. The entry of new projects into the database has stabilized and become more rational, shifting from an emphasis on quantity and speed to an emphasis on quality.

Among the 8,654 projects that entered the database over the five years, 4,691 projects have been implemented, with an investment of 7.2 trillion yuan and an implementation rate of 54.2%.

PPP project implementation means that investors and local governments have signed PPP project contracts and entered the execution stage, but only project commencement has more substantive significance for economic growth.

Data from the PPP Center of the Ministry of Finance show that by the end of 2018, a total of 2,237 PPP projects had commenced, with an investment of 3.2 trillion yuan and a commencement rate of 47.7%.

A person in the PPP industry revealed that this means actual PPP investment over the five years totaled only 3.2 trillion yuan, averaging about 640 billion yuan per year. This investment scale is not as large as people might imagine, and compared with other infrastructure investment models such as local governments' financing platform companies, PPP investment is more standardized and transparent and more efficient.

PPP projects involve more than ten fields, among which municipal engineering, transportation, and ecological construction and environmental protection rank in the top three.

From the perspective of project return mechanisms, more than half (4,721) of PPP projects adopt the viability gap funding model, under which the government bears part of the operational subsidy expenditure responsibility. The other 3,307 PPP projects are mainly government-payment projects, meaning the government bears all operational subsidy expenditure responsibility. Only 626 PPP projects adopt user charges, a model under which the government does not bear operational subsidy expenditure responsibility. In 2018, the number of PPP projects using viability gap funding and government payment continued to grow, while user-charge projects continued to decline.