Legal Research


(Summary description)[Abstract] in 2018, our lawyers accepted the entrustment of an urban construction and development company to provide legal services for an international airport PPP project, and issued legal opinions on the terms related to the responsibilities of social capital parties in the PPP project cooperation agreement, so as to provide reference for accounting firms to determine whether to "make a statement" or "enter a statement".
[Abstract]
In 2018, our lawyers accepted the entrustment of an urban construction and development company to provide legal services for an international airport PPP project, issued legal opinions on the relevant provisions of the PPP project cooperation agreement related to the responsibility of social capital parties, and provided reference for accounting firms to determine whether to "make a statement" or "enter a statement".
[Key words] park development, Airport Economic Zone, government enterprise Cooperation Fund
[Project information]
The project belongs to urban comprehensive development, with an estimated investment of nearly 50 billion yuan. In accordance with the operation mode of "bot" (construction operation transfer), the project adopts the feasibility gap subsidy return mechanism, and the government pays the project company the feasibility gap subsidy fee with insufficient user fees on an annual basis.
The main cooperation contents of the project include: infrastructure construction, public service facilities construction, planning and design consulting services, other initial cost investment, project facilities operation and maintenance services and industrial development services within the cooperation period and cooperation area. The project construction mainly includes the construction of public facilities (culture, sports, education, medical care), transportation facilities, public facilities (water supply and drainage, sanitation), green square facilities, underground pipe network engineering, etc.
[Difficulty or novelty of the project]
The difficulty of this project lies in:
First, there is no final conclusion about the responsibility boundary of social capital in PPP projects.
At present, PPP experts and scholars have three views on the boundary between social capital and project company's responsibility to the government. The first view is that the social capital party shall bear limited liability to the project company to the extent of its contribution; the second view is that the social capital shall bear joint liability to the project company; the third view is that the social capital shall bear supplementary liability to the project company. In practice, the government and social capital side of the debate on this issue is also very big.
Second, to give legal advice, lawyers need to have the relevant knowledge and experience of financial processing.
The client hopes that the lawyer will issue legal opinions on the relevant provisions of the PPP project cooperation agreement concerning the responsibilities of social capital parties, so as to provide a reference for the accounting firm to determine whether to "make a statement" or "enter a statement". If the client does not have the relevant knowledge of financial treatment, it is impossible to give targeted opinions. Therefore, the lawyer is required to have relevant knowledge and experience.
[Lawyer response]
In order to complete the project, our lawyers carefully review the relevant agreements of the project. Starting from the cooperation agreement, according to the cooperation agreement, the social capital side should be "responsible for coordinating and solving" the financing matters. How to understand the agreement becomes the key to solve the problem.
Therefore, our lawyers analyze it from the following aspects: firstly, what is the legal definition of "responsible for coordination and settlement"; secondly, from the perspective of legal significance, how to measure the degree of "responsible for coordination and settlement" and to what extent it can be identified as "responsible for coordination and settlement"; thirdly, under the cooperation agreement, whether it is legal to make "social capital" decisions Finally, Article 4.5 of the cooperation agreement stipulates that the winning social capital is responsible for coordinating and solving the withdrawal of the financing party. If the winning social capital has made reasonable efforts to coordinate, and the financing party has not recovered the principal and income in full, whether it has the right to recover from the winning social capital In this case, social capital needs to bear more responsibility to the capital side. Through the progressive analysis, the problems provided by the client were demonstrated in detail, and the legal opinions were issued, which effectively solved the needs of customers.
[Achievements and summary of legal services]
By the end of 2018, our lawyers had issued legal opinions on the relevant provisions of the PPP project cooperation agreement, which provided a very favorable basis for the accounting firm to determine whether the social capital party made the statement, and was recognized by the client.
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