PPP is a series of cooperative relationships established by the government and social capital to develop public facilities and provide public services. PPP projects are mostly public products or semi-public products, with large investment and long payback period. Under the background of limited local financial funds and insufficient management and operation ability, introducing social capital to participate in the construction and operation of PPP projects can increase the sources of project investment and financing, give play to the advantages of social capital project construction and operation, and improve the quality and operation efficiency of the project. What is the market prospect of the highly respected PPP model? As an important financing medium, can commercial banks find a "comfortable" way to participate? This paper attempts to discuss these problems and put forward constructive suggestions.
Connotation and mode of PPP
With the introduction of policy documents regulating the development of PPP, the connotation of PPP in China has gradually become clear. In 20 14, the Ministry of Finance put forward the development model of PPP from the perspective of alleviating the pressure of fiscal revenue and expenditure and reducing the risk of government debt, and the National Development and Reform Commission put forward the development model of PPP from the perspective of promoting local investment and economic growth. 20 15 the State Council No.42 reached a preliminary understanding of the development model of PPP: First, it solved the legal relationship of public-private cooperation. PPP is an equal contractual relationship in which the government purchases long-term public services from social capital. The second is to clarify the responsibilities of the participants. In the process of providing public goods through PPP, the public sector and social capital should recognize the benefits and risks. At the same time, PPP is not a means for the government to shirk its responsibility, and the government still has the responsibility to choose social capital in a competitive way to ensure the quality of supply; Third, the extension of social capital has been broadened, and some qualified local government financing platforms have also been included in the scope of social capital, eliminating the policy conflicts between ministries in the early stage.
At present, PPP is mainly used in public service fields such as energy, transportation, water conservancy, environmental protection, agriculture and forestry, science and technology, affordable housing projects, medical care, health, pension, education and culture. , and through the purchase of services, franchising, equity cooperation in three ways (see table 1).
The difference between PPP and government financing platform participating in public investment
For the construction of public facilities and the provision of public services, PPP projects and local government financing platform projects have a high degree of overlap, and most of them are public or semi-public, and even some PPP projects are directly transformed from platform projects, but they are essentially different:
The participants are different. Under the PPP model, social capital is the main body of public investment. SPV is set up alone or jointly with the government to undertake the responsibility of project construction and operation during the contract period and share the risks and benefits with the government. Under the platform mode, the platform company is the main body of public investment, which is established by local governments and their departments and institutions through financial allocation or injection of assets such as land and equity, and undertakes the financing function of government investment projects and co-ordinates project construction and operation.
Debt subjects are different. Under the PPP model, social capital or SPV undertakes debt repayment responsibility through market-oriented borrowing, and the main source of debt repayment is the income brought by the operation of the project itself; The government only undertakes franchise, reasonable pricing, financial subsidies and other related responsibilities to investors or SPV as agreed, and does not undertake debt repayment responsibilities, that is, it is not included in the scope of local government debt. Under the platform model, in addition to the project operating income, the source of debt repayment comes from government expenditure, and the government undertakes explicit or implicit debt guarantee for the debt.
At present, the national local government debt risk is gradually accumulating. In order to prevent local debt risks, the local government financing function of financing platform companies will be gradually replaced by local debt and PPP under the impetus of a series of clean-up and normative documents.
Problems in the current development of PPP
Although governments at all levels spare no effort to standardize and promote PPP, there are doubts about the low signing rate and endless applause in the market. In the PPP information platform of the Ministry of Finance, as of the end of February 20 16, there were only 35 1 projects in the implementation stage, accounting for 5% of the total project library; According to the statistics of the National Development and Reform Commission, by the end of 20 15, the contracted amount of the first batch of 329 projects was only close to 1/3. At present, the problems existing in the development of PPP cannot be ignored.
The attraction and availability of the project are insufficient. Social capital and financial institutions are mainly worried about the problems of large investment, long payback period and unclear income of PPP projects. Taking the second batch of PPP projects of the National Development and Reform Commission as an example, the average investment of a single project is 65.438+52 billion yuan; Among them, the average investment in transportation PPP projects reached 5.78 billion yuan, the average investment in public service PPP projects and ecological environment PPP projects such as schools and hospitals was about 500 million yuan, and the investment in a few projects was also more than 30-40 million yuan. From the mode point of view, most of them are franchises such as TOT and ROT, and the investment cycle is generally 20 to 30 years. From the perspective of benefits, from the collected cases of PPP projects that are being promoted or recently signed, IRR is mostly around 7%~8%; At present, the average profit rate of listed companies in water conservancy environment, public utilities and other industries is about 15%~20%, and the expected average profit rate of PPP project cycle is at the middle and lower reaches of the industry.
The government tends to "emphasize financing over management". The contradiction between rising local government debt and slowing economic growth is the main motivation for the current government to promote PPP. In particular, the financing function of PPP has become the lifeline of the steady growth of local governments, which makes it tend to "pay more attention to financing than management". "Paying more attention to financing than management" will have the following adverse effects on PPP promotion: First, the project life cycle demonstration is insufficient, and there is a risk of local government performance. The second is to continue the traditional administrative context and lack the concept of project risk. Third, the management system and mechanism are not perfect and the transaction cost of PPP operation is high.
The participation of financial institutions is still cautious. In China, where indirect financing is dominant, whether financial institutions, especially banks, actively participate in PPP will determine the success or failure of PPP. At present, banks and other financial institutions are relatively cautious when PPP laws and government's performance ability are not perfect. Mainly subject to the following four aspects: first, the term is long, the investment payback period of PPP projects is long, the scale of capital demand is large, and the bank funds take up for a long time; For example, the payback period of infrastructure PPP projects is generally more than 10 years, and that of the elderly is 30 years. Second, it is difficult to evaluate. Usually, SPV is the main body of PPP project financing, while SPV project company has few mortgage assets and its cash flow depends on future project income, which is contrary to the current credit evaluation system based on the historical operation of banks. At the same time, the opacity and asymmetry of information among project participants also increase the difficulty of evaluation. Third, it is risky. In the case of long project construction and operation cycle, the risk factors from the credit of project investors and the project market environment increase, making it more difficult to accurately predict the market prospect. At the same time, PPP projects are greatly affected by policies. Under the background of imperfect PPP legal environment, the change of government may affect the implementation of a series of agreements signed between social capital and the original government. Fourth, it is difficult to quit. At present, the channels for capital to withdraw from PPP projects are still limited.
Countermeasures and suggestions for commercial banks to participate in PPP
Suggestions on the strategic choice of PPP business
With the improvement of P P P related systems, the enhancement of project scientificity and operability, the divestiture of platform financing function and the promotion of local governments' demands for steady growth, PPP has entered an important period of development opportunities, and PPP mode will become one of the main supplementary ways of public investment. However, considering that it will take some time for the PPP model to mature, it is suggested that commercial banks choose developed regions, key customers and high-quality projects to actively intervene. First, it is conducive to increasing comprehensive income. Participating in PPP projects can not only obtain interest income, but also obtain intermediary business income and capital precipitation such as asset custody, financial consultancy and consulting services, cash management, and improve the comprehensive income level of PPP projects. Second, it is conducive to improving the quality of assets. About 80% of the existing PPP project library is invested in infrastructure construction. As a substitute for the financing function of the platform, although the PPP model weakens or cancels the government credit guarantee, the project undertakes the supply function of some public goods or services, and the income is stable, and the asset quality is better than that of competitive industries and private enterprises. Third, it is conducive to optimizing the asset structure. In the context of the continuous decline in the growth rate of manufacturing and real estate investment, participating in high-quality PPP projects will help commercial banks adjust their credit structure and reduce the risk of public credit. In addition, participating in PPP projects is conducive to deepening the cooperative relationship with the government and state-owned enterprises, and * * * participates in the whole process operation of the project.
The overall participation strategies and suggestions are as follows:
First, seize the opportunity to expand quality customers. Pay close attention to policy progress, strengthen communication and coordination with central and local governments, and fully tap PPP market opportunities. Strengthen project reserve, increase marketing expansion, dig deep into customer demand, and focus on marketing high-quality customers and projects with social capital experience in related fields, stable cash flow of project operation, complete return mechanism and price adjustment mechanism.
The second is to strengthen innovation and reduce capital occupation. Actively study and support the linkage mode of investment and loan, select high-quality projects, and reduce the risks brought by large and long-term loans through the combination of issuing loans and setting up (participating in) investment funds, so as to obtain dividend income higher than the benchmark interest rate of loans. Improve the PPP product system, formulate supporting comprehensive marketing guidelines, and explore mortgage pledge guarantee, project management, business operation and other modes that meet the characteristics of PPP business.
The third is to strengthen capabilities and guard against operational risks. Strengthen capacity building and enhance the professional ability of commercial banks to participate in PPP project evaluation and evaluation. Strengthen access management, select customers and projects, and ensure that all parties involved in PPP projects comply with relevant national PPP regulations and the credit policies of the industries to which commercial banks belong. Strengthen post-loan management, strengthen fund closed management, and regularly track and check the financial status, collateral, implementation of sustainable conditions, government fund management and payment behavior of the project.
Suggestions on product configuration of PPP business
According to different links of PPP projects, commercial banks can provide different financial services for government departments, social capital and SPV project companies.
Suggestions on risk prevention and control of PPP business
Project selection suggestion
PPP project has a large demand for funds, long project cycle and great uncertainty. On the premise of meeting the credit policies of commercial banks, priority should be given to supporting urban infrastructure and public services with transparent charging and pricing mechanisms and stable cash flow. The main project selection suggestions are as follows:
(1) The project complies with the relevant regulations of the Ministry of Finance on PPP, industry and regional development planning, environmental protection and other policies. , and obtain the relevant approval (approval, approval, filing) documents.
(2) The project is included in the PPP integrated information platform project library of the Ministry of Finance. Give priority to the central or provincial demonstration projects, and choose the implementation projects that have passed the value-for-money evaluation and financial affordability demonstration.
(3) The project must have a clear source of repayment and a stable operating cash flow, and the project contract must have a clear return mechanism and a charging pricing adjustment mechanism. The income from user fees and government fees should fully cover the loan principal and interest; And government payment departments should be included in the government budget at the same level and implemented in accordance with the relevant provisions of budget management.
(4) The proportion of project capital is generally not less than 30% of the total project investment. For projects that enter through industrial funds and equity investment products, the total amount of equity and creditor's rights funds provided for the same project shall not exceed 80% of the total project investment.
(5) Do not intervene in projects with imperfect supporting facilities and failed to pass the price hearing mechanism.
Customer selection suggestion
The borrower of PPP loan business is a domestic enterprise legal person, including social capital or project company (SPV), which complies with the relevant regulations of the Ministry of Finance on PPP. Due to the short duration of the project company, it is difficult to meet the conditions of commercial bank loan customers, so social capital qualification should be considered at the same time in PPP project decision. The main customer selection suggestions are as follows:
(1) Social Capital has more than 3 years of investment and operation experience in public services and infrastructure projects, has technical advantages in the industry, and operates steadily.
(2) The relationship between social capital and the equity of the project company is clear, and both have sound organizational structure and financial system norms.
Regional selection suggestion
Regional economic level and government credit status are one of the main decision-making bases for participating in PPP projects. The main area selection suggestions are as follows:
(1) The project is located in municipalities directly under the central government, provincial capitals and cities with separate plans.
(2) The project is located in a prefecture-level city, and the following conditions must be met at the same time: the repayment source is mainly government payment, the regional GDP is more than 200 billion yuan, and the revenue in the general budget of local finance needs to be more than 654.38+08 billion yuan, and the factors such as local fiscal revenue, GDP and local government debt are comprehensively considered.
The source of repayment is mainly the user's payment. Combined with the requirements of general budget revenue and regional GDP, the total retail sales of local social goods should be above 654.38+000 billion yuan.
Other risk control suggestions
PPP project is a systematic project from project establishment, construction, operation and handover, and the risk factors in different links are different and influence each other. Commercial banks need to comprehensively consider the risk points of the whole project cycle and strengthen dynamic management.
(1) Pay attention to pre-loan management (investment). In addition to examining the financial strength of social capital, the authenticity and legal compliance of application materials, it is also necessary to focus on: whether the rights and obligations assumed by social capital, government payment methods, risk sharing methods, etc. are reasonable; Trading conditions, such as project return mechanism, charging pricing adjustment mechanism, etc. ; Adjustment arrangements such as contract change, extension, early termination, project addition, reconstruction and expansion requirements. ; Performance guarantee, etc.
(2) Seek adequate risk mitigation. Under PPP mode, loans only rely on their own assets as collateral, and banks basically have no recourse to other assets of project sponsors. This requires commercial banks to pay attention to the implementation of project collateral (such as land and projects under construction mortgage, charging rights and accounts receivable pledge, etc.). When developing PPP business, seek other means of risk mitigation, such as social capital participating in project construction and operation to provide completion guarantee, issuing financial support commitment, and implementing guarantee company guarantee.
(3) Strengthen post-loan (investment) management. The first is to implement closed-end loan management. The marketing project company shall open a special account for fund supervision, and conduct closed management of project capital, other self-raised funds, project income and government payments (government payments and financial subsidies, etc.). ) and other funds. Second, establish a ledger, track and check the use of project credit and repayment of principal and interest, and timely warn and report sensitive information. If there is any situation that may affect the normal full repayment, measures such as early loan collection and additional guarantee should be taken in time to prevent and resolve the loan risk.