Sewage treatment, competitiveness, local government
Local governments are the buyers and payers of sewage treatment services, and the risk of repayment in the industry has increased significantly in the context of tightening financial pressure. Sewage treatment enterprises return the initial investment by charging sewage treatment service fees, and their downstream customers are local governments. On the one hand, the sewage treatment service fee paid by the local government to the sewage treatment enterprises comes from the sewage treatment fees collected from the terminal pollutant discharging units and individuals (collected by the water supply enterprises), and on the other hand, from the general budget expenditure. At present, sewage treatment service fees are more than 50% dependent on the general budget expenditure of the local government. In the context of tightening financial pressure, sewage treatment enterprises generally have the problem of large arrears, and the collection rate continues to decline.
Under the new PPP mechanism, the abolition of guaranteed water quantity and payment according to efficiency have become the development direction of the industry. On the one hand, the setting of guaranteed water quantity solidifies the government's expenditure responsibility to a certain extent, and there is a risk of new hidden debts. In recent years, some PPP projects have been required to rectify the transaction arrangements due to the establishment of a "minimum guarantee" mechanism. Therefore, it is very likely that new sewage treatment projects will cancel the guaranteed water supply, and local governments may also negotiate with sewage treatment enterprises to cancel the guaranteed water quantity clause in the existing PPP contract, which will increase the operational risk of existing projects with low actual capacity utilization and relying on guaranteed water supply. On the other hand, the new PPP mechanism emphasizes that the additional income obtained by sewage treatment enterprises by strengthening management, reducing costs, improving efficiency, and actively innovating is mainly owned by franchisees, and enterprises with outstanding technical advantages and cost control capabilities are expected to obtain incremental benefits in the future.
There are obvious individual differences in the price and cost of sewage treatment projects, and the expected rate of return is highly correlated with the regional economy. The investment and operating costs of sewage treatment projects are highly correlated with the status of the original plant network and sewage conditions in the region, while the sewage treatment price covers the investment and construction of the enterprise, the operating costs and a certain expected rate of return are determined on the basis of the winning bid. Individuals vary widely and there is no uniform standard. From the perspective of the expected rate of return, the better the regional economy, the more obvious the government's price reduction behavior, and the lower the expected rate of return.
The industry trend of factory and network integration and "one city, one enterprise" is obvious. In recent years, sewage treatment projects have developed towards the integration of plants and networks, and the business pattern of "one city and one enterprise" will be strengthened.
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