Official interpretation: The full name of PPP is public-private-partnership, that is, "public-private partnership", which means that the government and private organizations cooperate to build urban infrastructure projects.

Simple understanding: PPP mode is actually a public-private cooperation mode and a complete project financing concept derived from BOT form. To put it simply, the government will unite social capital to form a new company to build and operate this project.

2.PPP operation mode

Image source: bidding radar

The operation mode of PPP mode is very flexible. Take the Oriental Garden, the pioneer of PPP mode, as an example:

1) First, social capital such as oriental gardens and the government are combined to form a PPP project company.

2) Then this company undertakes the government's PPP project, and after obtaining the franchise, it contracts this project to Oriental Garden, which is responsible for the construction of the project.

3) In this process, Oriental Garden needs to prepay the capital to the PPP project company, and can't receive the project payment until the whole project is completed.

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

The main feature of PPP mode is that local governments and enterprises will participate in the formulation, planning, construction and operation of the project.