First, the basic concept of PPP PPP(Private-PublicPartnership) is a cooperation model between the public sector and private enterprises, which means that the government, for-profit enterprises and non-profit enterprises cooperate with each other based on a certain project. Through this mode of cooperation, all parties can achieve more favorable results than acting alone. When partners participate in a project, the government does not transfer all the responsibilities of the project to private enterprises, but all parties involved in the cooperation share the responsibilities and financing risks. PPP is a complete concept of project financing, and its initial form is the bot model which has attracted much attention in 1985- 1990. An earlier and more formal PPP model appeared in 1992, "PrivateFinanceInitiative (PFI)" proposed by the British Conservative government. At that time, PFI model was mostly used in the construction of transportation field (up to 85% in Britain). But now, as the successor of PFI, PPP is widely used to finance various infrastructure projects. To be exact, PPP is not a fixed model, but a series of possible choices, such as service or management contract, planning-construction, planning-construction-operation and so on. These different forms have some similarities: (1) I hope to transfer more risks to the private sector; (2) Improve the cost utilization efficiency of the project; (3) Improve the charging efficiency and level for community users. Second, the structural characteristics of PPP model The organizational form of PPP model is very complicated, which may include for-profit enterprises, private non-profit organizations and public non-profit organizations (such as the government). Inevitably, there will be different levels and types of interests and responsibilities among partners. Only when the government and private enterprises form a mechanism of mutual cooperation can the differences between the partners be blurred and the project objectives be achieved on the premise of seeking common ground while reserving differences. The basic framework of PPP mode is that the government signs a franchise contract with a specific target company through government procurement (the specific target company is generally a joint stock limited company composed of a construction company, a service management company or a third party investing in the project), and the specific target company is responsible for financing, construction and operation. Governments usually reach direct agreements with financial institutions that provide loans. This agreement does not guarantee the project, but promises to the lending institution that it will pay the relevant fees according to the contract signed with the special target company. This agreement enables special target companies to obtain loans from financial institutions more smoothly. Due to the different contents of the agreement, PPP implementation forms are also diverse. In an extreme form, the private sector provides almost all the funds to bear the main risks brought by the project, such as construction cost risk, delay risk, and the risk brought by the decline in project yield and higher-than-expected operating costs. At the other extreme, the private sector only designs and builds a project defined by many parameters and operates only on a fixed income. Generally speaking, private contractors bear the risk of design, construction and delay, but the revenue promised by the government is enough to make up for the bidding cost and operating cost of the project. PPP mode is different from traditional contracting practice. The latter is to let the private sector run a project that was once run by the public sector. In this case, the private sector did not provide any capital, nor did it transfer responsibility and control. PPP is also different from complete privatization. In the case of privatization, except for some necessary controls, there is no need for the government, or the importance of the government in the project should be minimized. In most PPP projects, the government generally plays an important role. In the past 20 years, all industrial countries have been faced with increasing demand for public services and enormous financial pressure. Although the lack of government financial funds is the main reason for the emergence of PPP model, PPP does not only mean financing from the private sector. The main purpose of PPP is to achieve "value for money" for taxpayers or improve the efficiency of the use of funds. PPP can make taxpayers' money more valuable in many ways: (1) The private sector is usually more efficient in designing, building, operating and maintaining a project, which can be completed on time and with good quality, and it is easier to innovate; (2) Partnerships enable private and public sector executives to: (3) Private sector partners are usually associated with related projects in the economy, thus achieving economies of scale; (4) enable the project to accurately provide the services it really needs to the public; (5) Due to investment, private participants ensure the economic benefits of the project, while the government serves to ensure public interests. Risk sharing is a prominent feature of PPP. Experience shows that proper risk allocation is very important for the success of the project. The concept of risk sharing in PPP is constantly changing. In the early stage of PFI in the UK, the focus was on transferring all risks to the private sector. However, after a period of practice, it is found that it will be more beneficial for the development of the project to let all parties bear the best risks they can bear. The risk sharing concept of PPP solves the problem that traditional public sector construction can not handle project risks well. In short, the biggest feature of PPP mode is to introduce the private sector into the public sector, so as to improve the efficiency and benefit of public facilities services and avoid the disadvantages of excessive investment, delayed construction period and poor service quality of public infrastructure projects. At the same time, some risks of project construction and operation are borne by special target companies, which disperses the investment risks of the government. Properly organized PPP can also give the government better financial control. With the expertise of private partners, the public can obtain better designed public infrastructure through PPP projects. In addition, from a macro perspective, PPP stimulates economic activities by allowing the private sector to play a more important role than before in the traditional government field. Public-private partnership also enables the experience and skills gained in one market to be shared by other markets, improves the operating efficiency of the market and provides impetus for long-term economic development. Third, the comparison between BOT and PPP Compared with the PPP model, the BOT project financing model has long been well known to Chinese people, and there are many successful examples in China. PPP is derived from further optimization on the basis of BOT concept. The basic model of BOT is that the government provides the concession agreement for the construction and operation of the project as the financing basis, and domestic or foreign companies arrange financing, undertake risks and build the project as investors and operators, and operate the project within a limited time and get a reasonable return, and finally return the project to the government according to the agreement. Understanding the similarities and differences between them is conducive to deepening the understanding of PPP mode. (similarity between BOT and PPP 1. The parties of these two financing modes include financiers, investors and guarantors. The financier refers to an economic entity specially established for the development, construction and operation of a project, such as a project company. Investors refer to governments, enterprises, individuals or consortia that provide direct or indirect financing for projects. Guarantor refers to the organization or individual that provides financing guarantee for the project financier, and can also be the government. 2. Both of these models are based on signing concession agreements, which make the public sector and private enterprises have contractual relations. Under normal circumstances, the government will sign a franchise agreement, which will be built, operated, maintained and managed by private enterprises, and the project company established by private enterprises will assume the responsibilities and repayment obligations stipulated in the contract as a franchisee. 3. Both modes use the profits of project operation to repay debts and get the return on investment, and generally use the assets of the project itself as collateral. (2) The difference between BOT and PPP 1. The organizational structure is different. Under the BOT mode, the interaction between the public sector and private enterprises involved in the project is hierarchical. There is no mutual coordination mechanism in the organization, and all participants in different roles have their own interest goals-maximizing their own interests, which is easy to produce conflicts of interest. According to the principle of information economics, due to the lack of coordination mechanism in BOT mode, there is information asymmetry among participants. Driven by the maximization of their respective interests, all parties in the game finally reach the "Nash equilibrium", in which the maximization of one party's interests is at the expense of other participants, and its total social income is not the largest. PPP mode is a complete concept of project financing, but it is not a complete change of project financing, but a new organizational setting mode in the process of project life cycle. It is a form of cooperation among the government, for-profit enterprises and non-profit enterprises based on a project and with the concept of "win-win" or "win-win". All parties involved can achieve more favorable results than expected by individual actions. In the organization, although the participants did not achieve the ideal maximum benefits, the total benefits were the largest. Pareto optimization, that is, maximizing social benefits, was obviously more in line with the purpose of public infrastructure construction. To sum up, the PPP model is a "win-win" based on mutual cooperation and exchange between the public sector and private enterprises, which not only avoids the long work cycle in the early stage of the project caused by the lack of mutual communication and coordination in the BOT model, but also solves the financing difficulty caused by the fact that all risks of the project are borne by private enterprises. The public sector and private enterprises can achieve the long-term goal of mutual benefit and win-win, achieve a win-win situation, and can 2. Operating procedures The operating procedures under different BOT modes include: bidding, establishment of a project company, project financing, project construction, project operation management and project handover. The operating procedures of PPP mode include: selecting project cooperation companies, establishing projects, establishing project companies, bidding and project financing, project construction, project operation management and other links. From the perspective of running the program, the difference between the two modes is mainly in the early stage of the project. In PPP mode, private enterprises begin to participate in the project from the project demonstration stage, while in BOT mode, they begin to participate in the project from the project bidding stage. More importantly, in PPP mode, the government always participates in it, while in BOT mode, after the franchise agreement is signed, the government's influence on the project is usually weak. Four. Other financing methods: TOT, ABS (1) TOT financing methods The so-called TOT (transfer-operation-transfer) method refers to the transfer of completed public projects, such as bridges and highways, to foreign-funded enterprises or private enterprises for management within a certain period of time, and the enterprise organizations can use the obtained management rights to obtain benefits within a certain period of time. After the expiration of the contract, it shall be returned to the preparation department or unit. In the transfer to foreign or private enterprises, the government or its established economic entities will get certain funds to build other projects. This method is popular in some places, such as nanpu bridge and Yangpu Bridge. TOT is mostly used in infrastructure projects such as bridges, expressway, power plants and water plants. After the government department or the original enterprise hands over the project, it can obtain certain funds to build other projects. Therefore, introducing private capital through TOT mode can reduce the financial pressure of the government and improve the efficiency of infrastructure operation and management. TOT mode has many advantages over BOT mode: TOT financing mode only involves the transfer of management rights, and there is no dispute over property rights and equity; It is conducive to revitalizing the stock of state-owned assets, raising funds for new infrastructure and accelerating the pace of infrastructure construction; It is conducive to improving the technical management level of infrastructure and accelerating the pace of urban modernization. ☆ Exam is big ☆ First-class constructor editor (II) ABS financing method ABS is securitization financing supported by the assets owned by the project. Specifically, it is a project financing method based on the assets owned by the project and guaranteed by the expected return of the project assets, and raising funds by issuing bonds in the capital market. The characteristic of this financing method is that projects with lower credit rating can still enter the international high-grade bond market through its unique credit rating promotion method, and the advantages of high credit rating, high bond security and liquidity and low bond interest rate in this market can greatly reduce the project financing cost. Compared with other financing methods, ABS securities can not be restricted by the original owner's own conditions, bypass some objective obstacles and raise a large amount of funds, which is very flexible. Its advantages are as follows: (1) The government can invest in some infrastructure projects through authorized institutions, issue ABS securities through special trust institutions, and repay debts with the future income of these facilities, which can speed up infrastructure construction and stimulate economic growth. In this way, the government does not need to use its own credit to guarantee the repayment of bonds, nor is it bound by the tax collection ability and financial budget (such as issuing bonds), which will not increase the financial burden and ease the financial pressure. (2) With ABS financing, although the asset ownership of the project belongs to SPV during the bond issuance period, the asset operation and decision-making power of the project still belongs to the original owner. Therefore, when using ABS for financing, there is no need to worry that the project is an important project related to the national economy and people's livelihood and is controlled and used by foreign investors. This is what BOT financing does not have. (3) The relationship between the issuer and the investor is purely a creditor-debtor relationship and does not change all the rights and interests of the project. So as to prevent the project from being controlled by investors and ensure that the profits generated by infrastructure operation will not substantially flow out. As the owner, the government does not need to make commitments and arrangements for the return on investment of the project. (4) It lightens the credit burden of banks, which is conducive to optimizing the financing structure, diversifying investment risks and providing investors with broader investment channels. V. Comparison of Applicability of PPP, BOT, TOT and ABS Although the above financing methods have their own advantages, the applicable conditions are different, the adaptation environment is different, and the role, risks and costs of the government are also different. The following table will compare the characteristics and applicability of these financing methods.

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