Public-private partnerships in China: A case of the Beijing No.4 Metro line

Through a case study on Beijing's No. 4 Metro line, this paper illustrates benefits, costs, opportunities and risks in public-private partnerships (PPP) in China. It describes the process to land a concession agreement; demonstrates the consequences for revenue and costs from using a private entrepreneur; and estimates the benefits to the public sector. By using a PPP model, the public sector may save up to 31% of its initial investment and 9.4% of total expenses during the concession. The private investor may earn a profit, but bears a risk due to absence of the rule of law.