After a year of experimenting, China has decided its policy on the private sector's entry into urban utilities once monopolized by the government.

A regulation made public in Beijing Wednesday says that private investors could run water, gas and heat supply, public transportation, and water and trash treatment if they win public bids and get the franchise from the government.

However, they can only run for 30 years at most, and their companies would be taken over if the government believed after a due procedure that they threatened the public security.

"We started the pilot in 2003, and discovered some local governments have given the investors over-long franchise terms or promised fixed rates of return," said Li Dongxu, a Construction Ministry official responsible for urban infrastructure.

While giving the government more power, the regulation also protects investors from government's abuse of power, said Li.

The regulation states that the government, when breaching contracts, must pay for losses of investors and compensate those who bear losses for abiding by its order for public good.

"Our purpose is to establish a good surveillance system and a good rule to play the game at the same time. Only in this way, can the market of urban utilities be smoothly opened," said Li.

(Xinhau News Agency April 22, 2004)