Encouraging private participation in public projects

  • Date: 2017-12-22

I. Background
In 2000, Taiwan promulgated the Act for Promotion of Private Participation in Infrastructure Projects to build a regulatory foundation and conducive environment for public-private partnerships (PPP). From 2002 through December 8, 2017, public and private entities signed 1,532 PPP contracts worth NT$1.26 trillion (US$42 billion) in total, cutting government expenditures by NT$1.5 trillion (US$50 billion) while increasing revenues by NT$765.2 billion (US$25.5 billion), and creating 230,000 jobs over the terms of the contracts. These cooperative arrangements support a portion of the government’s public mission and contribute positively to Taiwan’s economic development.

II. Encourage private participation, faster completion of projects

A. Strengthen the PPP regulatory and operating environments, boost investor confidence
1. The PPP act was revised on December 30, 2015, following which the enforcement rules for the act were also amended accordingly.
2. The Regulations for Favorable Rentals Regarding Public Land Lease and Superficies in Infrastructure Projects were revised to limit increases on public land rent to 6 percent per year.
3. The types of major infrastructure projects permitted to offer tax benefits for investors have been expanded to cover government office building projects (excluding land) having investments of NT$1 billion (US$33.4 million) or more.

B. Create a PPP platform, attract more investors, help government agencies set up projects
1. The government has formed an advisory task force and convened PPP investment platform meetings to help remove barriers to investment.
2. Government agencies are given a time limit to evaluate their PPP policies and take stock of all potential investment cases. Projects under the Forward-looking Infrastructure Development Program that qualify for the PPP scheme are receiving priority review.
3. Investor conferences and business forums have been organized.
4. Assistance and consultation are provided to help government agencies initiate investment projects.

C. Provide subsidies, encourage government agencies to promote PPP scheme
1. Government agencies receive subsidies for setting up PPP projects.
2. Rewards are given to local governments that sign investment agreements with private organizations.
3. The Golden Thumb Awards are conferred to encourage outstanding central and local governments and private organizations.

D. Strengthen guidance and follow-up measures
1. Projects with private investments of NT$1 billion or more are assessed once a month for progress.
2. Government agencies have established task forces to formulate promotional strategies and time tables for infrastructure projects with PPP potential. The task forces also initiate warning and tracking measures for projects falling behind schedule.

III. Conclusion
Government resources are limited but the strength of the private sector is unbounded. Infusing private-sector resources into public infrastructure not only reduces public expenditures and enhances government services, but also accelerates socioeconomic development while achieving winning outcomes for government, businesses and the people of Taiwan.