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Measures
of Shenzhen Municipality on management
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of
Public Utilities under Franchise
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Chapter
I General Provisions
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Article
1 In order to improve the efficiency and quality of public
service, protect public interests
and the lawful rights and
interests of franchisees, promote the development of public
services,
these measures are hereby formulated.
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Article
2 In these measures, "management of public utilities under
franchise" means the Municipal
Government specially authorize
those enterprises or other institutions which meet requirements,
within a certain period of time and a certain area, to manage a
certain kind of public service.
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Article
3 The government encourages social funds, overseas capital to
establish public utilities
and engage in the operation of public
service franchise, through the forms of exclusively investment,
joint venture and cooperation.
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Article
4 The management of public utilities under franchise shall
protect public interests from
infringement in priority. A
franchisee shall ensure the continuance, safety, high quality,
high
efficiency, equity and reasonable price of the universal
service.
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A
franchisee may gain reasonable benefits through lawful operation
and shall bear corresponding
business risks.
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Article
5 The government and franchisees shall establish public
participation mechanism through
which encourage the public to
supervise the public service.
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Article
6 The supervision department of public services (hereinafter
referred to as the "Supervision
Department" ) is in charge of
the supervision over management of public service under
franchise,
while other governmental departments perform
supervision functions according to their respective official
duties.
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Chapter
II Management Right under Franchise
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Article
7 The subject to authorize the management right of public
service under franchise shall
be the Municipal Government or it´s
authorized Supervision Department .
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Article
8 The subject of authorization may, through invitation to bid,
invitation for subscription
or other manners specified by laws,
regulations and rules, grant the management right of a certain
public service under franchise via issuance of Certification of
Management Right of Public Service under Franchise
of Shenzhen
Municipality (hereinafter referred to as the
"certification" ) to the qualified applicant.
The specific
requirements shall be specified by the documents of invitation
to bid and the letter
of invitation for subscription.
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In
the case of applying for management right of public service
under franchise, an applicant shall
make commitments on such
matters as the ownership and disposal of the public utilities,
the transfer
of stock rights, the relevance liabilities in the
operation of the public service and other business.
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Article
9 The procedures stipulated in the national Law of Invitation to
Bid and Bidding shall be
applicable in case the management right
under franchise being granted through invitation to bid. The
specific measures shall be determined by the announcement and
documents of invitation to bid.
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Article
10 In these measures, invitation for subscription means that
after the announcement of the
public services to be franchised,
the subject of authorization or its agency invites those
applicants,
through prudent investigation and negotiation,
determining candidates list which will be submitted to the
assessment commission for preferential negotiation, and then
determines the party to be granted the management
right under
franchise in the end.
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Article
11 The certification shall be recorded the following matters:
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(1)
The
authorizing party and the authorized party;
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(2)
The
content, region and time limit of the management right under
franchise;
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(3)
The
ownership and disposal of the public utilities;
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(4)
The
retrieve of management right under franchise;
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(5)
The
obligations and liabilities of the franchisee;
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The
obligations and duties of the franchisee as specified in the
preceding paragraph shall include:
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(1)
abiding
by laws, regulations and rules;
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(2)
standard
and requirements for public service;
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(3)
maintenance
and establishment of public utilities;
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(4)
acceptance
supervision, temporary take-over or other administration
implemented by the Supervision
Authority according to laws,
regulations and rules;
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(5)
acceptance
supervision by the public;
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(6)
making
or adjusting price according to laws, regulations and rules;
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(7)
other
obligations and liabilities.
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Article
12 The certification is the legal basis for a franchisee to
carry out business under franchise,
whose scope shall not exceed
the provisions of the certification.
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Anyone
shall not undertake the business of franchise of public service
before obtaining the certification.
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Article
13 The government may, according to the characters of different
public services, reduce
or exempt franchise fees.
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Article
14 A franchisee shall be prohibited to dispose the management
right under franchise through
such means as transfer, lease or
pledge.
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Article
15 Any management right under franchise shall be terminated upon
expiration of the franchise
period. In the case of applying for
extension of franchise period, a franchisee shall, within the
stipulated time limit before the expiration of the management
right under franchise, apply for such extension.
The franchise
period may be extended in case the subject of authorization,
through examination,
considers the franchisee meet the
requirements for extension. However the extension of franchise
period shall not exceed two times.
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The
time limit as specified in the preceding paragraph shall be
determined by the annex of these
measures.
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Article
16 In case a franchisee falls into the following circumstances,
the subject of authorization
shall retrieve the management right
under franchise:
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(1)
Disposing
management right under franchise through the means such as
transfer, lease or pledge;
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(2)
Failing
to meet the requirements for being granted management right
under franchise due to transfer
of corporate stock right;
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(3)
Falling
short of standards and requirements for providing public
products or public services, which
seriously affects public
interests;
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(4)
Causing
major safety accident due to mismanagement, which seriously
affects public interests;
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(5)
Financial
position deteriorating seriously due to mismanagement, which
endangers public services;
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(6)
Failing
to invest or establish public utilities according to city
planning and rejecting to make
correction after being ordered to
make correction within time limit by the Supervision Authority;
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(7)
Suspending
of shutting up the business without authorization;
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(8)
Breaking
commitments made when it was applying for the management right
under franchise;
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(9)
Other
circumstances as stipulated by laws, regulations and rules.
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Article
17 The decision of retrieve of management right under franchise
shall be noticed to the
franchisee in writing by the subject of
authorization. The franchisee may bring forward a written plea
or demand a hearing within 30 working days upon receiving the
aforesaid written notice. The subject of authorization
shall
organize a hearing in case the franchisee demands it.
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Article
18 In case the public service is unable to be carried out due to
force majeure event during
the period of franchise, after being
approved by the subject of authorization of the application
which motivated by the franchisee, the management right under
franchise may be terminated ahead of schedule..
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Article
19 The original franchisee shall, after the management right
under franchise being retrieved
or terminated, hand over the
essential assets and files for keeping the operation of the
franchised
business within the time limit set by the subject of
authorization, to the unit designated by the subject of
authorization.
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Article
20 After the management right under franchise being retrieved or
terminated, the government
shall pay reasonable compensation for
the part of the net value of the fixed assets which invested by
the original franchisee to maintain the normal operation of the
business under franchise.
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Where
the management right under franchise is retrieved according to
Article 16 of these measures,
the original franchisee shall pay
compensation for the expense payout by the government for
re-granting
management right under franchise and handing over
operation.
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Article
21 After the management right under franchise being retrieved or
terminated ,and before
the completion of taking over by a
designated unit, the franchisee shall perform the duty of guard
with goodwill and keep the normal operation.
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Chapter
III Public Utilities
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Article
22 The government, who is the owner of the public utilities
invested by it, may deliver
those utilities to a franchisee
through the means such as lease, etc..
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A
franchisee shall build new public utilities according to city
planning. After the management right
under franchise being
retrieved or terminated, such utilities shall be handed over to
the government
according to its commitment. However the
government shall pay reasonable compensation for the investor in
case it is required by these measures or a prior agreement.
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Article
23 A franchisee shall allow other operators to connect its
public utilities according to
planning. The rules on price
administration shall be applicable to determine the fees result
from
the connection.
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Article
24 In case it is necessary to access to some sections or
buildings for establishing or maintaining
public utilities, the
franchisee shall consult with the owner, while the owner and
relevant personnel
shall make things convenient for the
franchisee.
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Article
25 The maintenance of public utilities shall abide by relevant
rules on administration of
road and virescence, while the
setting of a site or stop and alteration of a pipe or route
shall
be subordinated to the general plan of the Municipal
Planning Authority. In case it is necessary to make rush
repairs, the franchisee may make the urgent repairs, notify
relevant authority simultaneously, and
handle relevant
procedures after the event.
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Article
26 A franchisee shall overhaul and maintain the situation and
performance of the public
utilities periodically and report the
performance situation to the Supervision Authority on schedule.
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Article
27 A franchisee shall collect, classify, settle and pigeonhole
such materials as drawings,
etc. of all of the public utilities,
improve the information administration system of the public
utilities and connect to the governmental net.
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Article
28 The government may requisition the public utilities for
public interest. A franchisee
shall offer cooperation while the
government shall pay reasonable compensation for the investor.
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Chapter
IV Price
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Article
29 The Price Authority of the Municipal Government together with
the Supervision Authority
shall take charge in the fixing or
adjustment of price for public service.
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Article
30 The principles for fixing prices of public service shall
include: compensatory cost,
payable tax according to law,
reasonable gains, saving resource, promoting development and
bearing
capability of the society.
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Article
31 The price of public service is composed of costs, taxation
and profits.
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The
cost is the average cost of the society, includes all producing
cost and course expenditures
which shall be reckoned in the
price.
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The
benefit is the reasonable income of a franchisee. Based on the
characters of different business,
the benefit shall be appraised
and decided according to the yield of net assets or net-worth of
fixed assets respectively.
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Article
32 The cost shall be appraised and decided by the following
measures:
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(1)
The
purchasing price of raw and processed materials, adjective
materials and fixed assets, shall
be appraised and decided
according to the regulated price in the case of governmental
pricing;
while in the case of market-oriented pricing, the
purchasing price shall be appraised and decided according to
average market price at the time of purchasing, where the
purchasing price is lower than the average
market price,
purchasing price shall depend on the actual purchasing price.
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(2)
Expenditures
of wage, sale and management, which are subject to proportion
control of amount, shall
be appraised and decided according to
the total amount of those expenditures in proportion to the
amount of the total costs of the same trade or similar
enterprises in the recent three years with a reference
to the
social average level of the municipality.
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(3)
The
depreciated fixed assets shall be the assets relevant to the
provision of products or services
of public service, but those
public utilities owned by the government are precluded. Those
fixed
assets left unused for more than 9 months shall not be
allowed to depreciate, until after resuming to be used for
more
than 3 months may be allowed to depreciate. The period of
depreciation shall be determined
by the Financial Authority,
Price Authority, relevant Supervision Authority and franchisees
according
to the rule of reason.
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Article
33 The Price Authority shall establish periodical price auditing
system and database of
costs information to form effective cost
restriction mechanism. For the purpose of ensuring the
authenticity and veracity of the cost for price, the making or
altering of cost for price shall be audited by a
competent
auditing institution if it is necessary.
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Article
34 In the presence of the Supervision Authority, the Price
Authority shall specifically
determine the means of appraisal
and decision of yield of different trade, which shall be
recorded
in the annex of these measures. The scheme of the yield
shall be brought forward by the aforesaid authorities according
to the factors such as the average margin of the society,
banking interest rate and price index,
and then submitted to the
Municipal Government for confirmation.
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The
Price Authority in the presence of the Supervision Authority
shall check the yield each year
and adjust it when necessary.
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Article
35 The procedures for fixing and adjusting prices of public
service shall be as the follows:
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(1)
The
franchisees, the public service supervisory committee, the
consumer organization, the trade
association or the Supervision
Authority may file a written application to the Price Authority
for fixing or adjusting prices, while the Price Authority who
has the right of fixing price or other relevant authority
may
bring forward scheme for fixing and adjusting prices according
to relevant price rules and
then the Price Authority shall
organize a testimonial session.
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(2)
The
Price Authority shall initially examine and verify the
integrality of the application materials
upon receiving a
written application, and in case there are some materials
absent, the Price Authority
shall demand the applicant to submit
other necessary material within time limit. In case the
application
meets the requirements for a hearing, the Price
Authority shall make decision on organizing a hearing within 15
days upon accepting the application and harmonize with relevant
authority for the prophase work
for the hearing;
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(3)
The
Price Authority shall hold the hearing within 3 months upon
making the decision on organizing
of the hearing and service the
letter of appointment and materials for the hearing to the
representatives
of the hearing. The hearing shall be held with
the presence of more than two third of the aforesaid
representatives;
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(4)
In the
presence of the Supervision Authority, the Price Authority shall
fully consider the opinions
brought forward by the hearing when
studying out a price scheme, which shall be submitted for
examination
according to their respective purview. The summary,
notes and materials of the hearing shall be simultaneously
submitted when submitting for examination;
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(5)
The
price scheme, after being approved, shall be announced to the
public and operators through the
governmental website and other
medias and shall be organized for implementation.
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Article
36 For the purpose of insuring relatively stabilization of
public service price, reserve
fund for price adjustment, which
will be special used to regulate and control the public service
price and profit, may be set up according to characters of
different public services. Such specific measures shall
be
formulated separately.
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Article
37 A franchisee shall carry out the rules on price supervision
and price standard regulated
by the government.
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Chapter
V Supervision
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Article
38 The supervision authority shall perform the following
functions to implement the supervision
over the franchisees:
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(1)
taking
charge in the organization of invitation to bid and invitation
for subscription for management
right under franchise of public
service;
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(2)
formulating
evaluation standard for quality of products and services;
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(3)
supervising
franchisees to perform legal obligations;
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(4)
accepting
the complaint against franchisees brought by the public;
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(5)
investigating
and prosecuting illegal acts of franchisees;
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(6)
bringing
forward opinions and advices and supervising on the
five-year-business-plan and annual
business plan of franchisees;
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(7)
supervising
and examining the quality of products and services provided by
franchisees;
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(8)
assisting
the Price Authority to fix and adjust price, appraise and
decided, supervise and control
over costs and expenditures;
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(9)
examining
the annual report of franchisees;
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(10)
submitting
the annual supervision report on franchisees to the Municipal
Government;
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(11)
temporary taking over public services in emergency;
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(12)
other obligations as stipulated by laws, regulations and
rules.
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A
franchisee shall submit its five-year-business-plan, annual
business plan, annual report, matters
on alteration of such
chief officials as directorate and management group, and
decision of directorate
to the Supervision Authority for record
or examination at the time stipulated by the annex of these
measures or other agreement.
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Article
39 The Supervision Authority shall implement the following
supervisions over franchisees:
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(1)
whether
the quality of products or services are up to the mustard;
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(2)
whether
it has achieved the degree of satisfaction which regulated by
the trade association;
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(3)
whether
the annual and 5-year business strategy and investment project
have been submitted for record
and implemented;
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(4)
whether
its business and financial situation are well off;
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(5)
whether
its commitment has been fulfilled;
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(6)
whether
it has carried out the price rules;
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(7)
whether
the alteration of such chief officials as directorate and
management group, and decision
of directorate have been
submitted for recording;
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(8)
other
matters as specified by laws, regulations and rules.
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Article
40 A public service supervisory committee shall be set up to
take charge in collection opinion
of the public and franchisees,
bring forward advice on legislation and supervision and
represent
the public to carry out supervision over public
service franchise.
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Chapter
VI Legal Liabilities
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Article
41 In violation of Article 23, Article 26 and Article 27 of
these measures, a franchisee
shall be ordered to make correction
within time limit and be imposed
a fine of no less than RMB 50,000 but no more than RMB 500,000
by the Supervision Authority.
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In
violation of Article 12, Article 14, Article 19, Article 21 and
Paragraph 2 of Article 22, a
franchisee shall be ordered to make
correction within time limit and be imposed a fine of no less
than RMB 500,000 but no more than RMB 1,000,000 by the
Supervision Authority.
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In
violation of Article 37 of these measures, a franchisee shall be
punished by the Price Authority.
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Article
42 A franchisee may apply for an administrative review or file
an administrative litigation
in case it refuses to comply with
the decision of punishment made by the Supervision Authority.
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Article
43 In case the staffs of the Supervision Authority misuse of
their authority, commit irregularities
for favoritism, neglect
duties, ask for bribes and take bribes, they shall be given
administrative
sanction according to law, and shall be
prosecuted for criminal liability in case it constitutes a
crime.
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Chapter
VII Supplementary Provisions
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Article
44 The subject of authorization may directly grant the
certification for the enterprise
or institution who has acquired
a management right under franchise on public service. However
the
commitment as stipulated in the Paragraph 2 of Article 8 of
these measures shall not be exempted.
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Article
45 The annex of these measures includes specific rules on
franchise of public service. The
annex may be promulgated with
these measures or separately.
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The
supervision authority may formulate specific administrative
rules according to these measures
and their annex, or conclude
an agreement on other matters.
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Article
46 These measures shall take effect as of May 1, 2003.
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(Translated
by Ruixin Lin) |
