In terms of strengthening urban infrastructure construction, the meeting identified several major investment directions, including municipal underground pipeline networks, sewage treatment, and subways and light rail, and emphasized that "while ensuring government investment and strengthening non-operational urban infrastructure construction, we will advance the reform of the investment and financing system, give play to the role of market mechanisms, treat all types of investment entities equally, and use franchising, investment subsidies, government purchases of services, and other methods to attract private capital to participate in the construction and operation of operational projects, and promote the improvement of weak links in urban infrastructure."

　　An expert told the reporter that the several areas identified at the meeting will leverage at least trillions of yuan in investment. The State Council's emphasis on attracting social capital to participate means that private capital is expected to get a larger share of the pie in this round of municipal construction.

　　Trillions in Urban Construction Investment List

　　The meeting listed the urban infrastructure construction tasks: first, build and renovate municipal underground pipeline networks, improve urban water supply facilities, and enhance urban waterlogging prevention capacity. By 2015, complete the renovation of 80,000 kilometers of urban gas pipelines and nearly 100,000 kilometers of old centralized heating pipelines in northern heating areas; second, strengthen the construction of sewage and domestic waste treatment and recycling facilities, with the harmless treatment rates of urban sewage and domestic waste reaching about 85% and 90% respectively by the end of the 12th Five-Year Plan period; in addition, it also includes strengthening the construction of large-capacity public transport systems such as subways and light rail, strengthening safety inspection and reinforcement of urban bridges, strengthening urban distribution network construction and promoting grid intelligence, and strengthening ecological environment construction.

　　Not long ago, the Ministry of Housing and Urban-Rural Development issued the "Outline for the Compilation of Comprehensive Urban Drainage (Rainwater) and Waterlogging Prevention Plans," which clearly listed the planning content, including assessment of urban drainage and waterlogging prevention capacity and waterlogging risk, and planning of urban drainage (rainwater) pipeline systems. The Ministry also stated that it aims to complete the separation of rainwater and sewage in drainage pipelines within five years and to build a relatively complete urban drainage and waterlogging prevention engineering system in about 10 years.

　　The State Council meeting also mentioned the principles of planning before construction and underground before aboveground, indicating the importance attached to urban "underground projects." Industry insiders said these plans are corrections to the shortcomings of urban construction in recent years and will urge localities to strengthen underground drainage pipeline construction, leveraging trillions of yuan in investment.

　　Jin Yongxiang, general manager of Dayue Consulting Co., Ltd., said in an interview that underground pipeline networks can leverage trillions of yuan in investment, and investment in public transport such as subways will also exceed a trillion yuan. Together with several other items, the total investment scale is likely to be several trillion yuan.

　　However, large-scale investment and construction by local governments have already accumulated a certain amount of local debt, and municipal construction may face financing bottlenecks. Taking local intercity railways and intercity rail transit as an example, under funding pressure last year, the Ministry of Railways delegated the financing and construction of intercity railways to local governments, which led to a "intercity railway" boom after the "subway boom" in various places. This State Council executive meeting once again mentioned strengthening the construction of public transport such as subways and light rail.

　　In this regard, Wang Mengshu, an academician of the Chinese Academy of Engineering, said in an interview that for intercity railways, all provinces are currently planning, but China Railway Corporation has made it clear that it will not provide funds and will only help with planning and design. The funding issue will be solved by the provinces themselves, including opening financing to social capital within the province, opening operating rights, and transferring land development rights along the lines. As long as private capital is given a certain return, it will attract more social capital.

　　Private Capital Expected to Get a Share

　　Not only subways and intercity railways, but other municipal projects are also expected to attract more private capital. This meeting sent a clear signal to private capital concerned about municipal construction. The meeting stated that market access should be opened up, reform dividends should be released, and whatever society can do well should be handed over to social forces as much as possible, to accelerate the formation of synergy in improving public services, effectively solve problems such as shortages of public service products and low quality and efficiency in some areas, and enable the people to enjoy more convenience and benefits.

　　The meeting also mentioned that while ensuring government investment and strengthening non-operational urban infrastructure construction, we will advance the reform of the investment and financing system, give play to the role of market mechanisms, treat all types of investment entities equally, and use franchising, investment subsidies, government purchases of services, and other methods to attract private capital to participate in the construction and operation of operational projects, and promote the improvement of weak links in urban infrastructure.

　　For a long time, China's urban infrastructure construction has been mainly led by the government, and social capital found it difficult to enter. Only in recent years has private capital begun to gain a place in areas such as sewage treatment, waste treatment, tap water, and natural gas. Jin Yongxiang said in an interview that private capital participation is particularly high in the first two, and this model mainly involves social capital competing for projects, with the government paying for the enterprises' services through fiscal funds. However, areas such as urban pipeline networks are still completely monopolized by the government.

　　Jin Yongxiang believes that there used to be a view that urban infrastructure is a public welfare undertaking and must be built with fiscal funds. Now the government's concept has changed greatly: public welfare undertakings do not necessarily have to be funded by the government; the government can meet public welfare needs by purchasing services.

　　Jin Yongxiang said: "Under government-led urban infrastructure investment, asset losses are serious. For example, a job worth 1,000 yuan costs 3,000 yuan to do. Unscientific evaluation has caused massive overcapacity, money has not been invested where it should be, and some municipal projects are inefficient. Opening municipal construction to social capital will not only save a large amount of construction funds but also greatly improve efficiency. Market-oriented urban infrastructure can truly drive the transformation of urban development modes, and social capital can truly meet the needs of citizens and urban development."

　　Jin Yongxiang introduced that currently the most open areas are sewage and waste treatment. Although natural gas is open, state-owned enterprises create another form of monopoly. Market-oriented operation not only means that social capital obtains projects through competition, but private capital will also conduct scientific evaluations of projects. Private capital generally will not intervene in unnecessary municipal projects, thus saving funds to the maximum extent.

　　The State Council executive meeting also emphasized the need to improve the scientific, standardized, and legalized level of urban construction management. On the basis of scientific planning and full demonstration, construction of ongoing projects should be accelerated, and new projects should start sooner. Quality must come first, and unrealistic "image projects," "vanity projects," and corruption-breeding "jerry-built projects" must be strictly prohibited, so as to truly build for the people and benefit the people, and win the trust of the people with practical actions.