What exactly is PPP mode? What are the entry opportunities? How should I play?
Today, we carefully sorted out several major PPP investment types in the market, and gave a detailed example of the operation mode of a project and enterprise to see where the investment opportunities in the PPP market are.
First, the dual elements of "public-private partnership+public * * * products" constitute the core of PPP mode, aiming at improving the supply efficiency of public * * * products.
PPP mode: public-private partnership+public goods.
PPP is the abbreviation of public-private partnership, that is, public-private partnership mode, which is a mode of financing public infrastructure projects. The general process is that private enterprises participate in and complete the construction of relevant public infrastructure through cooperation with the government. Among them, there are broad sense and narrow sense:
In a broad sense, PPP is a cooperative relationship between the government and the private sector to provide public goods or services, which can be divided into three categories: franchising, outsourcing leasing and privatization; The well-known BT (construction, transfer), BOT (construction, operation, transfer) and PFI (private active financing) all belong to the category of generalized PPP;
Narrow PPP is similar to franchise projects, but it emphasizes the whole process cooperation of enterprise departments. Typically, the government and the private sector form a special purpose agency (SPV) to run the project. In essence, the government gives private companies long-term franchise rights and income rights in exchange for infrastructure construction. Both the government and enterprises participate in the whole process, and the cooperation time between the two sides is longer and the information is more symmetrical. At present, the cooperation mode of government and social capital vigorously promoted in China mostly belongs to the category of generalized PPP.
The core function of PPP mode is to improve the supply efficiency of public goods.
The concept of PPP has two core elements, one is public-private cooperation, and the other is public goods. The core purpose of PPP mode is to better provide public goods or services, and public goods are usually exclusive. When the government provides public goods independently, it will be inefficient because it is both an athlete and a referee. After introducing the private sector, we can make full use of the professional advantages of the private sector and improve the supply efficiency of public goods. At the same time, the government must also assume the responsibility of supervising the quality and price of public products.
The ideal goal of PPP project operation should be:
Private sector: by giving full play to its own professional advantages, improve the efficiency of project operation and obtain long-term, stable and low-risk return on investment;
Government departments: by transferring all or part of the management rights and income, we can achieve the effect of reducing financial expenditure, reducing debt burden and focusing on public affairs management;
Users: Based on the professional operation of the private sector and the effective supervision of the government, users will enjoy more cost-effective and effective services.
Second, the triple demand of comprehensively deepening reform, innovating financing mode and hedging macroeconomic downside risks has opened the PPP wave in China.
The need to comprehensively deepen reform
The core of economic system reform is to correctly handle the relationship between the government and the market, so that the market can play a decisive role in the allocation of resources and better play the role of the government. PPP mode emphasizes the cooperation between the government and social capital, and its essence is that the government purchases services, which is of great significance for accelerating the transformation of government functions and improving the ability of national governance.
Promoting the use of government and social capital cooperation model is an inevitable requirement to promote economic transformation and upgrading and support new urbanization construction; It is an institutional change to accelerate the transformation of government functions and enhance the ability of national governance; It is an important part of deepening the reform of fiscal and taxation system and building a modern financial system.
The need to hedge the risk of macroeconomic downturn
In 20 14, China's GDP increased by 7.4%, hitting a new low in 24 years. In 20 14, the contribution of investment, consumption and export to economic growth was 48.6%, 5 1.2% and 0.2% respectively. From the perspective of investment, consumption and export, the growth rate of export is slowing down, consumption is relatively stable, and investment has dropped significantly. Facing the downward pressure of the economy, the government work report lowered the economic growth target for 20 15 to around 7.0%. Restricted by the imbalance between supply and demand and the shrinking global economy, it is unrealistic to rely on consumption and exports to stabilize growth. Therefore, investment is still the main means of steady growth in China at this stage.
From the perspective of the three major investment sectors, the continuous decline in the growth rate of real estate development investment shows that it is difficult to rebound obviously in the short term, while the manufacturing investment is overcapacity due to weak demand, and the probability of investment rebound in the short term is also very small. Therefore, at present, to stimulate investment in fixed assets, we can only rely on infrastructure investment that the government can drive. Under the circumstances that the growth rate of government revenue is declining and the flexibility of borrowing is limited, the PPP model is expected to drive social funds to participate in basic investment extensively, thus hedging macroeconomic downside risks.
Innovative financing mode
The huge private wealth introduced under the PPP model can play a great role in resolving local stock debts, boosting the financing mode of infrastructure construction to a new stage, and solving the financing dilemma of urbanization.
In recent years, solving the problem of local debt accumulation has been the focus of the government. If PPP mode is introduced into the stock projects of local financing platforms, it can not only solve the difficulties of transportation and other projects, but also actively promote the investment and construction of stock infrastructure projects, which can kill two birds with one stone for the government.
According to the calculation of the State Council Research and Development Center, by 2020, the urbanization rate is expected to reach 60%, and the related financing demand is nearly 42 trillion yuan. The original investment and financing system relying on finance and land will be difficult to support such huge financing. If PPP mode is introduced into the financing of supporting infrastructure projects in urbanization, it will be beneficial to attract social capital and form a diversified and sustainable capital investment mechanism.
Policy-intensive introduction The government is determined to promote PPP.
Since the Ministry of Finance issued the Notice on Issues Concerning the Popularization and Application of the Cooperation Model of Government and Social Capital in September 20 14, the State Council, Development and Reform Commission, CDB, Ministry of Environmental Protection, Ministry of Communications and other ministries have successively issued nearly 20 policies and measures in the field of PPP, involving water supply, heating, sewage treatment, garbage disposal, comprehensive environmental improvement, transportation, new energy vehicles, underground common ditches, medical care and sports.
In the preferential policies for sponge city and underground pipe gallery pilot cities, the Ministry of Finance proposed to give 10% financial support to the pilot cities adopting PPP mode. The Ministry of Finance will also set up a PPP guiding fund with an estimated scale of 1000 billion in China, formulate financial management measures for PPP projects, and prepare PPP legislation. It can be said that the actions are frequent, which shows the attitude of the government in promoting PPP.
Third, the application field of PPP model is expanding, and different types of projects adopt different models.
The application field of PPP mode is expanding continuously.
The scope of application of PPP model has been significantly expanded from the initial "urban infrastructure and public services with a high degree of marketization" to the latest "public services such as energy, transportation, water conservancy, environmental protection, agriculture and forestry, science and technology, affordable housing projects, medical care, health, pension, education and culture".
In the list of the first batch of 30 PPP demonstration projects published by the Ministry of Finance in February 20 14, the industries are 9 sewage treatment projects, 8 rail transit projects, 3 water supply projects, 3 heating projects, 2 environmental comprehensive treatment projects, new energy vehicles 1 one, underground common ditch projects 1 one and medical projects 1 one.
The main operating modes recommended by government departments: operating, quasi-operating and non-operating project modes are different.
In the Guiding Opinions on Cooperation between Government and Social Capital, the National Development and Reform Commission proposed to adopt different operation modes to distinguish operational projects, quasi-operational projects and non-operational projects.
Among them, operating projects refer to projects with clear charging basis, and operating expenses can completely cover investment costs. It is suggested to adopt BOT, BOOT and other modes.
Quasi-operating projects, that is, projects whose operating expenses are not enough to cover the investment cost and need government subsidies for some funds or resources, suggest adopting BOT, BOO and other modes, and promoting them through measures such as granting franchise with additional subsidies or directly investing in shares.
For non-operating projects that lack the basis of "user pays" and mainly rely on "government pays" to recover investment costs, it is suggested that the government purchase services and adopt market-oriented models such as BOO and entrusted operation.
Domestic PPP project promotion status: third-and fourth-tier cities take the lead, and the transportation field is the hottest.
By the end of May 20 15, there were 104 1 PPP projects audited by the National Development and Reform Commission, with a total investment of 1.97 trillion yuan. Among the 104 1 projects, Anhui Province ranks first with 127 projects. Nearly 87% of the provincial projects come from third-and fourth-tier cities, and another 13% comes from first-and second-tier cities. Among them, the largest investment is in the transportation field, accounting for 64% of the total. Rail transit projects are the main projects in first-and second-tier cities, and highway transportation projects are the main projects in third-and fourth-tier cities. In terms of project operation mode, BOT mode still dominates, with a total of 442 BOT projects, accounting for 42.46% of the total number of projects.
Fourth, the application of several typical subdivision fields under PPP mode
Railways: The railway development fund adds 200-300 billion yuan of private capital to invest in railways every year.
At present, the domestic railway investment funds mainly rely on the total railway loans and the issuance of bonds, which account for the main part of the total funds. The state has also set up a railway construction fund and arranged a financial budget, which adds up to about 60 billion yuan per year, which has little impact on the railway investment of 800 billion yuan per year.
20 14 China Railway Development Fund Company was formally established. The fund was jointly established by Industrial and Commercial Bank of China, Agricultural Bank, China Construction Bank and Industrial Bank. The railway development fund aims to comply with the call of national policy, attract social capital to participate and revitalize railway land resources, and its central idea coincides with PPP model.
According to the relevant plan, in 20 14-20 15 years, the fund will attract 400 billion yuan of social funds to enter the railway field. Railway Development Fund is an enterprise fund with a duration of 15-20 years, with Tiezong as the main sponsor and social investors as preferred shareholders. The establishment of the Railway Development Fund has opened up a new growth space for the public-private cooperation mode in the railway investment field in China. Taking this opportunity, it is expected that the pace of private capital entering the railway sector will continue to accelerate, and railway PPP projects will also be promoted.
Subway: PPP projects began to replicate successful cases.
The Beijing Metro Line 4 project is the first subway PPP project in China. Part B of the project is fully financed by Hong Kong Metro, Beijing-Hong Kong Metro Company and Beijing Investment Corporation. The project company is responsible for the operation and maintenance of Line 4 by leasing Party A's facilities. After the operation expires, the project will be handed over to the government free of charge.
Since then, the south extension project of Nanjing Metro 1 Line has also adopted PPP mode. At the end of 20 14, Jinggang metro company signed a franchise agreement with the Beijing municipal government for metro line 14, and will also sign an intentional cooperation agreement for line 16. Metro lines 14 and 16 will copy the PPP model of Metro Line 4, and the private investment will increase from 4.6 billion yuan in Line 4 to/kloc-0.5 billion yuan, and the two lines will be * * * 30 billion yuan. It can be predicted that the subway PPP project is expected to be gradually replicated and continuously promoted from point to point.
Sewage treatment: PPP has a very broad application space.
With the official promulgation of "Water Ten Articles" which can generate a trillion-dollar market in April of 20 15, the improvement of water pollution prevention standards will become the focus, the relevant investment in sewage treatment projects will increase substantially, and the corresponding PPP market space for water treatment has been opened.
5. Design consulting companies and equipment supply and engineering construction companies will benefit from PPP feast.
In the first half of 20 15, the overall trend of PPP was the intensive introduction of national policies, and governments and enterprises at all levels set up teams to reserve projects, resulting in more projects under discussion and fewer projects landing, and the overall progress was slower than market expectations. It can be expected that the bidding and signing of PPP projects at the enterprise level will accelerate in the second half of the year.
The preliminary work is one of the key cores to determine the success or failure of PPP project, and it is also the most technical, time-consuming and labor-intensive link in the whole project. Engineering design is at the front end of the industrial chain of engineering construction, and it is an important link of investment and finished product realization, which directly affects the economic benefits of the project. While undertaking the project design business, the design consulting company can provide consulting solutions for the investment, financing, construction and operation of the project, and introduce partners in the back-end link, thus leading the planning and implementation of PPP projects, so it may become the first company to make efforts and benefit from the PPP model. At the same time, benefiting from the start of the project, enterprises with significant competitive advantages in the fields of equipment supply and engineering construction can also take the lead in participating in this reform feast with design consulting companies.
6. Typical cases and rising companies under the influence of 6.PPP
1. The first PPP project in China urban rail transit: Beijing Metro Line 4.
The average daily passenger flow has exceeded one million.
Beijing Metro Line 4 is one of the main lines of Beijing rail transit network. It starts from the Gongyi West Bridge in the South Fourth Ring Road of Fengtai District in the south, passes through Xicheng District, and reaches Anhe Bridge in Haidian District in the north. The total length of the line is 28.2 kilometers, with 24 stations. The total investment of Line 4 is estimated to be 654.38+05.3 billion yuan, which was officially started in August 2004 and put into trial operation on September 28, 2009. At present, the average daily passenger flow has exceeded 6.5438+0 million.
Public-private cooperation mode with franchising as the core
The investment and construction of Line 4 is divided into two relatively independent parts, A and B. Part A is civil works such as tunnels and stations, with an investment of about 654.38+007 billion yuan, accounting for about 70% of the total project investment, which is undertaken by Line 4 Company, a wholly-owned subsidiary established by the wholly state-owned investment company of Beijing Municipal Government. Part B consists of vehicles, signals and other equipment, with an investment of about 4.6 billion yuan, accounting for about 30% of the total project investment, which will be undertaken by Beijing Jinggang Metro Co., Ltd. (hereinafter referred to as "Jinggang Metro"), a PPP project company. Beijing-Hong Kong Metro was established by Beijing Investment Corporation, Hong Kong Metro Corporation and the Capital Group at a capital contribution ratio of 2:49:49.
After the project of Line 4 is completed and accepted, Jinggang Metro obtains the right to use the assets of Party A of Line 4 Company through lease. Jinggang Metro is responsible for the operation and management of Line 4, the maintenance of all facilities (including Part A and Part B), the asset renewal outside the tunnel and the commercial operation inside the station. Through the subway ticket income and the business operation income in the station, the investment can be recovered and a reasonable investment income can be obtained.
After the end of the 30-year franchise period, Jinggang Metro handed over part B project facilities to the designated department of the municipal government in good condition and free of charge, and returned part A project facilities to Line 4 Company.
The "double insurance" of policy guarantee and benefit and risk sharing has laid a solid foundation for the success of the project.
Establish a strong policy guarantee system
The successful implementation of the PPP project of Beijing Metro Line 4 largely benefited from the active coordination of the government, which provided an all-round guarantee for the project. In the whole project implementation process, the government changed from the former leader to a full participant and a full guarantor, and the government set up a leading group for attracting investment headed by the deputy secretary-general of the municipal government; The National Development and Reform Commission took the lead in completing the PPP project implementation plan for Line 4; The transportation Committee leads the negotiations; Beijing Investment Company is responsible for the specific operation and research in this process.
Construct a reasonable income distribution and risk sharing mechanism
The smooth cooperation between the government and social investors in the PPP project of Beijing Metro Line 4 benefits from the reasonable income distribution mechanism and effective risk sharing mechanism of the project. Through the ingenious design of fare mechanism and passenger flow mechanism, the project has found an effective balance between the economic interests of social investors and the public interests of the government, brought reasonable expected benefits to social investors, and improved the management and service efficiency in the field of Beijing rail transit.
Fare mechanism
If the operating fare of Line 4 is subject to government pricing management, the actual average passenger fare cannot fully reflect the financial characteristics such as the operating cost and reasonable income of the subway line itself. Therefore, this project adopts "fare calculation" as the basis for determining investors' operating income, and establishes the adjustment mechanism of fare calculation.
On the basis of fare calculation, the franchise agreement stipulates the corresponding fare difference compensation and revenue sharing mechanism, and constructs the fare risk sharing mechanism. If the actual fare income level is lower than the expected fare income level, the municipal government shall compensate the franchise company for the difference. If the actual fare income level is higher than the expected fare income level, the franchise company shall return 70% of the difference to the municipal government.
Passenger flow mechanism
Fares are the main source of income for Line 4. Due to the adoption of government pricing, passenger flow has become the main factor affecting the project income. Passenger flow is not only affected by the service quality of franchise companies, but also by the urban planning of the municipal government. Therefore, it is necessary to establish a passenger flow mechanism that takes risks and enjoys benefits.
The passenger flow mechanism of Line 4 project is as follows: when the passenger flow is lower than 80% of the predicted passenger flow for three consecutive years, the concessionaire can apply for compensation or abandon the project; When the passenger flow exceeds the predicted passenger flow, the government will share 50% of the ticket revenue exceeding the predicted passenger flow 10% and 60% of the ticket revenue exceeding the passenger flow 10%.
2. Long Yuan construction: the rise of "China Macquarie"
Long Yuan Construction, the largest private construction enterprise in the Yangtze River Delta with the absolute focus on civil engineering, began to transform its layout company to PPP mode last year, aiming to build a comprehensive management platform for PPP projects. His actions in the following four aspects show his great ambition to become "Macquarie of China". Macquarie Group is one of the largest providers of special investment, financial consulting and financial services in the world, including infrastructure and tangible assets investment funds, investment management and professional investment solutions.
Establish an authoritative PPP team in China
Members of the company's PPP team have worked in companies such as Pudong Construction to engage in BOT and other investment projects, and their understanding of PPP mode far exceeds the industry average, and they also have a deep understanding of the capital market. At this stage, the company comprehensively trains and promotes the transformation concept of PPP mode from top to bottom, and plans to build a domestic PPP project management platform in the future to ensure business undertaking. At the same time, the service consciousness of private enterprises is better than that of central enterprises, which is also conducive to project undertaking and investment cooperation.
Reserve enough funds to enhance the project commitment.
At the end of 20 14, Long Yuan Construction Company issued a private placement with an amount of1600 million yuan. Most of the raised funds will be used as PPP project capital, which is expected to be used as inferior infrastructure investment funds to support bank loans and incite sufficient cash. The company's project investment and business undertaking ability will be stronger. With the additional funds in place, the strength of the company's PPP brand is gradually highlighted, and the company is expected to develop a full-process business system from self-financing to operation management in the future.
Targeted multi-domain layout
In the initial stage of PPP project development, Long Yuan Construction will extend to the fields of gardens/transportation/municipal administration on the basis of its main housing construction business, and it is expected to acquire the construction qualification and technical strength in urban rail and other fields through cooperative acquisition. In addition to professional and competitive environmental protection business, the company will gradually realize the comprehensive layout of PPP projects.
The establishment of a subsidiary plans to raise 654.38 billion yuan to engage in PPP business.
Long Yuan Construction completed the establishment registration of Long Yuan Famous City, a wholly-owned subsidiary of the company, in February 20 14, with a registered capital of 300 million yuan and an initial investment of 50 million yuan. Its main business scope is public facilities investment, roads, bridges, rail transit, water conservancy port facilities, environmental governance investment, health facilities investment, culture, sports, entertainment facilities and other industries. Long Yuan Famous City plans to cooperate with all kinds of social capital, * * * will jointly set up an industrial investment fund for infrastructure projects, and prepare to raise 654.38 billion yuan to invest in PPP projects.
The benefits of the company's evolution from a construction enterprise to a PPP project integrated management platform enterprise are obvious, and the income channels are greatly broadened:
The operating income of this project is about 7-9%. Through cooperation with local governments with large fiscal revenues, we can obtain high credibility, stable cash flow and strong safeguard measures. The characteristics of stable income and low risk enable the company to package the project operation income into standardized products, or follow Macquarie's infrastructure investment fund to issue and list.
The difference between project management income, contract cost and the actual cost reduced by the company after good planning.
Construction profit and capital precipitation income.
In the past two months, Long Yuan Construction became the first successful candidate for the PPP project of Jinjiang International Convention and Exhibition Center and the PPP project of Juxian People's Government for infrastructure construction, and signed the Xiangshan PPP investment fund with the target scale of 5 billion yuan with Xiangshan County People's Government. It is not difficult to see that the company's spring ploughing and autumn harvest in the field of PPP is coming soon.