Chongqing Municipality, Pledging of Rights to Fees and Rights to Proceeds from Infrastructure Projects Measures

Promulgated: February 11 2003
Effective: March 15 2003
Applicability: These Measures apply to pledging of rights to fees or proceeds in connection with the financing of construction or operation of infrastructure projects in Chongqing (Article 2). For the purposes of the Measures, "rights to fees" and "rights to proceeds" refer to the rights to undisputed fees and proceeds from construction or operation of an infrastructure project granted by the municipal government to a legal person who constructs or operates the infrastructure project; and "pledging of rights to fees or proceeds" refers to the use of such rights as security for borrowing loans from a financial institution to finance the construction or operation of infrastructure projects (Article 3).

Main contents: The Measures provide that a contract for pledge of rights to fees or proceeds shall set out (1) the value of the pledged rights and the method of its determination, (2) the scope of the security created by the pledge, (3) the manner by which the pledge shall be enforced and (4) the manner by which accounts are managed for the funds deriving from the pledged rights (Article 4). The value of the pledged rights is to be determined by the pledgor and the pledgee (Article 5). The contract shall be registered with the municipal department in charge of planning and filed with the municipal department in charge of finance and shall be effective upon such registration (Article 6). If the obligor for which the pledge is created defaults on its obligations under the pledge, the pledgee is entitled to acquire the rights to fees or proceeds in such manner as permitted by laws and regulations and enforce the pledge (Article 8). When the debt for which the pledge is created is fully discharged, the pledgor shall cancel the registration of the pledge with the registration authority (Article 11).