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Risk Factors for PPP: the Case of HZMB Project in GPRD Metropolitan

Risk Factors for PPP: the Case of HZMB Project in GPRD Metropolitan. Yao Yi, Associate Professor Guangzhou Academy of Social Sciences, China. HZMB Background. Hongkong-Zhuhai-Macao Bridge. PPP Development in China.

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Risk Factors for PPP: the Case of HZMB Project in GPRD Metropolitan

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  1. Risk Factors for PPP: the Case of HZMB Project in GPRD Metropolitan Yao Yi, Associate Professor Guangzhou Academy of Social Sciences, China

  2. HZMB Background Hongkong-Zhuhai-Macao Bridge

  3. PPP Development in China • Shajiao Thermal Plant, Shenzhen, 1988 • Labin Power Plant, Guangxi, 1995 First Round • National Olympic Stadium, 2003 • Beijing Subway No.4 Line, 2005 Second Round • No PPP national law or regulation • No PPP control organization Legal Framework

  4. End 2008 Early 2008 1990s Financing HZMB • COST: Keep Rising Feasibility Report: Overall: $11 billion Funding Scheme by GD, HK, Macao: Bridge: $6.3 billion Overall: $9 billion Estimated: $ 2 billion

  5. Funding Model: from BOT to Government Funding • Government Funding • End of 2008: • Government capital fund • bank loans BOT Model Early 2008: • Private investor • Government subsidy

  6. Government 1 Private sector 2 public 3 Stake Holders:

  7. Stake Holders: Government

  8. Stake Holders: Private sector: Attitude: active→ less interested Interests: profit prospect diminished Public opposition: law case in 2010, 1 year delay & 5% cost rise

  9. Huge investment vs. Low market return Legal constraints Barriers for PPP in HZMB Case Project coordination

  10. Market return risk Public opposition Lengthy decision-making process Loss of project uniqueness Conclusion: Risk Factors for PPP RISK

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