What is PPP? Who are familiar with PPP?

PPP (public-private-partnership) is a project financing model in public infrastructure. Under this model, private enterprises and private capital are encouraged to cooperate with the first class to participate in the construction of public infrastructure.

According to this broad concept, PPP refers to the process of public-private cooperation in which non-public sector resources are involved in the provision of public goods and services, so as to achieve a more favorable outcome for the parties to the cooperation than is expected to act alone.

Compared with BOT, the main characteristics of PPP in the narrow sense are that it is more deeply involved in the construction management and operation process in the middle and late stages of the project, and the enterprise is more deeply involved in the early stage of scientific research and project approval of the project. ** and enterprises are involved in the whole process, the cooperation between the two sides is longer, and the information is more symmetrical.

PPP is the English acronym of public-private-partnership, which refers to the competitive selection of social capital with investment, operation and management capabilities in the field of public services, and the two parties enter into a contract in accordance with the principle of equal consultation, and the social capital provides public services, and pays consideration to the social capital according to the results of public service performance evaluation.

PPP provides services in a market competitive manner, mainly in the pure public domain and quasi-public sector. PPP is not only a means of financing, but also a reform of the system and mechanism, involving the reform of the administrative system, the reform of the financial system, and the reform of the investment and financing system.

The meaning is as follows:PPP: The abbreviation of "public-private partnership", that is, social capital cooperation, is a kind of project operation model and auspicious mode in the construction of public infrastructure.

Infrastructure includes transportation, post and telecommunications, water supply and power supply, commercial services, scientific research and technical services, landscaping, environmental protection, culture and education, health and other municipal public works facilities and public life service facilities.

Intro Keylift:It is the common material basis for the production, operation, work and life of all enterprises, units and residents, the guarantee for the normal operation of the main facilities of the city, and an important condition for both material production and labor reproduction. Infrastructure construction refers to social projects such as perfection and renovation in infrastructure.

It refers to a cooperative project between ** and private organizations, in order to provide certain public goods and services, based on the concession agreement, to form a partnership with each other, and to clarify the rights and obligations of both parties by signing a contract to ensure the smooth completion of the cooperation.

The PPP project is a marriage with social capital. In the PPP project of going out, as a social capital from outside the host country, in order to ensure a harmonious and stable marriage in the project cycle in the next few decades, and to ensure a more active position in the event of a crisis, we should prepare the way in the relationship period (from the aspects of legal, contract and investment structure design in the early stage of the project).

The "PPP" model (public-private-partnership) is a public-private partnership model, which is not unfamiliar to the PPP model in China, and the model has been used in various industries for 30 years. Since the 80s of the last century, China has begun to get involved in the application of the "PPP" model in the infrastructure industry, mainly in the form of BOT. After years of development, the PPP model has been recognized by the society, and in recent years, the development trend of the PPP model has gradually risen, but there is still a lack of experience, and the popularity in China is not ideal.

In response to the lack of operational experience and lack of case guidance for PPP industry projects in China, the state once again boosted and released 13 typical PPP cases involving various industries at the end of July, including: Beijing Metro Line 4 project, part of the equity transfer project of Tianjin North Water Industry Company, Shenzhen Universiade Center project, Suzhou Wuzhong Vein Park waste incineration power generation project, etc., involving water conservancy facilities, municipal facilities, transportation facilities, The implementation of these 13 representative cases will provide relevant references to the PPP industry model to all sectors of society, and become the forerunner and benchmark for various industries to get involved in the PPP model in the future.

1. PPP meaning

Official interpretation: PPP stands for Public-Private-Partnership, that is, "public-private partnership", which refers to the cooperation between ** and private organizations in the construction of urban infrastructure projects.

Simple understanding: The PPP model is actually a public-private partnership model, which is a complete project financing concept derived from the form of BOT. To put it simply, it is a new company formed by combining the capital of the company and the Danshan Association to be responsible for the construction and operation of this project.

2. How PPP works

The operation mode of the PPP model is very flexible, and here we mainly take the Oriental Garden, the pioneer of the PPP model, as an example

1) First of all, Oriental Garden plus other social capital, and then combined with ** to form a PPP project company.

2) Then the company will undertake the PPP project of the first class, and after obtaining the franchise right, the project will be contracted to Oriental Garden, which is responsible for the construction project.

3) In this process, Oriental Garden needs to prepay the capital to the PPP project Shizhong Company, and will not receive the project payment until the whole project is completed.

4) After receiving the project payment, the money will be reflected as operating cash inflow.

The main feature of the PPP model is that from project formulation, planning to subsequent construction and operation, local governments and enterprises will participate at the same time.

One of the hottest words in 2014 PPP (public-private partnership, PPP) refers to the formation of a partnership between ** and private organizations in order to cooperate in the construction of urban infrastructure projects, or to provide certain public goods and services, based on concession agreements, and to clarify the rights and obligations of both parties by signing contracts to ensure the smooth completion of cooperation. The result is a more favourable outcome for the cooperating parties than expected to go it alone.

With the intensive promulgation of the PPP policy of the Ministry of Finance and the state and the continuous introduction of PPP projects in various provinces and cities, China's PPP market has officially entered the stage of large-scale operation, which has brought about a comprehensive innovation in urban development, public services, infrastructure construction, energy conservation and environmental protection, tourism and culture, pension and medical care.

In the future, Zhengqi will have trillions of projects that will introduce social trillions of capital, and PPP will also become an important part of a new round of local infrastructure funds after land finance and Juchailing financing platform.

References.

PPP (Public Private Partnership) model, PPP model originated from the British "public-private partnership" financing mechanism, refers to the joint construction of urban infrastructure projects with private organizations, or the provision of certain public goods and services, based on the concession agreement, the two parties through the signing of the contract to make the rights and obligations clear, so as to form a partnership, mutual supervision, and ultimately achieve mutual benefit and win-win results.

What are the advantages of the PPP model?

1. Avoid cost overruns.

The involvement of private organizations in the infrastructure means that both parties are involved in the construction of the project and can play a supervisory role in each other. And the PPP model can only be used when the project is completed and approved, so that the private organization can obtain benefits. The PPP model is conducive to improving the efficiency of project construction and reducing the cost of project construction, and can also avoid the risk of project funds.

2. Reduce the financial burden.

3. Mutual benefit and win-win.

The PPP model can enable ** and private organizations to learn from each other's strengths, give full play to their respective advantages, and make up for each other's shortcomings. The two sides can form a mutually beneficial and win-win situation.

4. Reasonable risk allocation.

PPP realizes reasonable risk allocation in the early stage of the project, and shares a part of the risk. This reduces the risk for contractors and investors, and also reduces the difficulty of financing the project. It means that the investment risk of PPP project has the best to help share a little.

For the PPP model, the financial planner said that the rise of the PPP model is a matter of recent years, but this model is not yet mature, and there are many shortcomings, especially the research on the risk of PPP projects is not enough, how big is the risk of PPP, and what are the disadvantages of this model need to be further studied. Therefore, investors must be cautious in investing in PPP projects and cannot buy arbitrarily!