Following the Ministry of Finance and other six ministries and commissions issued a document to further standardize local government debt financing behavior, and put forward clear requirements for various types of cooperation between the government and social capital parties such as PPP and government investment funds in accordance with laws and regulations, the Ministry of Finance recently issued another document to use the government to purchase services. Debt financing in a disguised form. The relevant person in charge of the Ministry of Finance said that this means that my country has initially achieved full policy coverage of the current local governments and their departments’ major illegal financing methods.
The “Notice of the Ministry of Finance on Resolutely Stopping Local Governments Purchasing Services in the Name of Illegal and Irregular Financing” is mainly aimed at some regions in disguised debt financing in the name of government purchases of services. Issues such as the service period are aimed at plugging the fiscal and financial risk loopholes.
“In recent years, local governments have promoted investment in order to stabilize growth. In order to speed up the launch of projects, some places have used fake government purchase services to launch projects in disguised forms of financing.” Tan Yunming, a professor at the Central University of Finance and Economics, told the “Securities Daily” reporter that due to local government financing The platform is stripped of the government financing function, and the local government packages the government procurement project into a government procurement service project, and agrees to pay the construction funds in the name of the government procurement service through entrusted construction and other methods, which increases the local government debt implicitly.
The “Notice” requires all localities to implement government procurement services in strict accordance with the scope of services determined by the Government Procurement Law. Among them, it is strictly prohibited to use railways, highways, airports, communications, water, electricity and gas, as well as infrastructure construction in the fields of education, science and technology, health care, culture, and sports. , Pre-development of reserved land, and construction projects such as farmland and water conservancy as government purchase service items. It is strictly forbidden to include financing provided by non-financial institutions such as financial institutions and financial leasing companies into the scope of government procurement services.
