CPCG suit exposes flaws in infrastructure model

Build-and-transfer system comes in for flak as company goes to court over late payments

The news that one of China's richest men has sued some local governments for late payments on infrastructure contracts has attracted widespread attention. But beyond the rarity of the legal case, the protagonist of the drama has also helped expose the hidden woes of a prevalent infrastructure financing model in China: build and transfer.

Yan Jiehe, founder of China Pacific Construction Group, said on Monday that he has sued local governments in Hebei, Yunnan, Guizhou, Hunan and Shandong provinces, in a bid to force payment of 900 million yuan ($144 million) his company is owed for infrastructure projects.