The application for the second batch of Sponge Cities, which is believed to see an investment potential of trillions of yuan, is in process. It learnt that the Ministry of Housing and Urban-Rural Development (MOHURD) now is selecting the second wave of national pilots for the Sponge City, and cities could become the pilots after winning primary selection and competitive assessment. Currently, various cities including Qingdao and Zhanjiang have submitted the application documents for national pilot of Sponge City in 2016, according to incomplete statistics. At the meantime, over 20 provinces and cities launch relevant planning to push the development of Sponge City, and initiate over 1,000 projects.
Referring to this, industrial insiders pointed out that, due to specialized capital support, local governments are highly interested in applying for becoming pilots, even planning stupendous investment scheme, however, much attention should be paid to measures, which only focus on construction and investment but ignore management and operation.
Planning: various local governments intensively issue construction scheme
Recently, Shandong Province announced to initiate the provincial pilot construction for Sponge City, and Shandong Province Finance Bureau will raise 200 million yuan to ensure that over 25 percent of its urban built-up areas can realize the Sponge City based renewal by 2020.
Shanxi Province also issued Implementation Opinions on Promoting Construction and Management of Sponge City recently to fully push its construction work related to Sponge City. The said Opinions points out that, before the end of 2016, Taiyuan cityand scientifically & technically innovative cities of Shanxi will firstly start the construction for Sponge City demonstration projects, and each city will also finish the formulation work for related construction planning.
Hainan Province also released the requirements of Implementation Opinions on Promoting Sponge City Construction that over 20 percent of its urban built-up areas should meet the requirements of Sponge City construction goal by 2020; as the national construction pilot city for Sponge City, Sanya city should comprehensively conclude the pilot experience and popularize it to the whole province.
Shaanxi Province recently launched implementation opinions to push the Sponge City construction, and will select two or three cities to carry out the provincial pilots for such construction.
Industrial insiders indicated that, under the background of slowing-down economy in China, the role of investment becomes increasingly important, but due to severe overcapacity in various industries, Sponge City program becomes the hotspot of local governments, who believed that related projects will bring in a huge amount of capital.
The minister of MOHURD Chen Zhenggao once mentioned frankly that building up Sponge City is an important investment direction under current pressure from economic downtrend. It is estimated that the investment for Sponge City construction will be round 100 to 150 million yuan per square kilometer, which is a huge investment space. It learnt that pilot cities can gain specialized capital and subsidies from the central government: within the three-year construction period, municipalities directly under the central government can get 500 million yuan annually with 400 million yuan for provincial cities and 300 million yuan for other cities annually.
Trend: projects will be actively invested with over 100 billion yuan
During recent months, many local governments intensify the strength for construction and planning of Sponge City nationwide, and regard this as priority among priorities for their investment in 2016. Jinan city lists the Sponge City construction as important content of ecological and civilized construction. It learnt that Jinan has totally arranged 43 large projects and 137 sub-projects with a total investment of 7,926 million yuan, and it also will achieve the Sponge City construction task in pilot areas in next two to three years.
Quanzhou city in Fujian Province preliminarily proposes to implement 794 livable environmental construction projects this year, with a total investment of 236.5 billion yuan and planning to invest 41.7 billion yuan annually. All municipal administration and house building projects in Yueyang city, Hunan Province are included into the governmental control scope, which will be planned, designed and constructed strictly based on the requirements for Sponge City, and the local government proposes to invest 4 billion yuan in next three years from now on to push the Sponge City construction. Wuhan city Hubei Province also points out that it plans to finish 389 Sponge City construction projects by 2017 with a total investment of 15,516 million yuan.
Meanwhile, Zhanjiang in Guangdong Province pointed out that it will invest around 4.6 billion yuan in the future to implement 147 Sponge City construction projects, partially, investment for carrying out PPP projects based on whole block reaches about 2,852 million yuan, accounting for 62 percent of total investment. In terms of Chengdu City, Sichuan Province, there are 130 projects in total with an investment of 26 billion yuan planned in 2016, including sponge complex engineering in ecological zone circling the city, sponge-based urban water ecology engineering, sponge-based greenbelt project, sponge-based residential area construction project and sponge-based road engineering.
Referring to Nanning City, it proposes to totally arrange 75 sponge construction projects for its Phrase I Project of Urban Construction Plan in 2016, it will continue to and newly construct 53 projects, including 4 out of the demonstration area, and 22 preliminary projects, and the total investment will be 4.92 billion yuan annually. Suining has determined 12 projects this year, including implementation task, and plans an annual investment of 2.7 billion yuan in total.
Nearly 20 cities invest 267.1 billion yuan totally in 2016, such as Wuhan, Jinan, Chengdu, Chizhou, Suining, Zhanjiang and etc., and the number of projects totals at 2,052, according to incomplete statistics.
Warning: it is unwise to follow the trend aimlessly
Insiders pointed out that Sponge City plan should rely on scientific and objective situation; we should not over state or devaluate the role of green rainwater infrastructures, or aimlessly invest the projects without considering geological conditions.
It should avoid the measures which only focus on construction and investment but ignoring management and operation, according to Chen Ling, senior engineer at the Jiangsu Institute of Urban Planning and Design. On one side, whether the effect of Sponge City construction can constantly play the role or not greatly depends on follow-up management and maintenance, how to keep the river and storage pond clean, and periodic cleaning and inspect influencing the development facilities, which require staff and capital.
On the other side, many pilot cities now have a number of Sponge City construction projects, and the existing capital and policies are difficult to effectively support the following operation and management. Although China encourages local governments to adopt PPP model to solve the difficulties caused by lacking of construction capital, it is not easy to operate the Sponge City construction projects in actual process, as these projects, such as green land, square and road reconstruction, cannot directly bring in operational revenue. Therefore, enterprises are not optimistic or active in prospective earnings of Sponge City construction projects. Related projects, especially sponge renovation projects in old towns, suffer difficulties in attracting investment.
Translated by Jelly Yi
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