PPP financing mode can make private capital participate in projects more, thus improving efficiency and reducing risks. This is what the current project financing model lacks. The government, public departments and private enterprises cooperate in the whole process on the basis of franchise agreement, and both parties are responsible for the whole cycle of project operation. The operating rules of PPP mode enable private enterprises to participate in the preliminary work such as the confirmation, design and feasibility study of urban rail transit projects, which not only reduces the investment risk of private enterprises, but also introduces more efficient management methods and technologies of private enterprises in investment and construction into the project, effectively controls the construction and operation of the project, thus helping to reduce the investment risk of project construction and better safeguard the interests of all parties of the state and private enterprises. This is of practical significance for shortening the project construction period, reducing the project operating cost and even the asset-liability ratio.
The ppp model can ensure that private capital is "profitable" to some extent. The investment goal of the private sector is to seek projects that can repay loans and return on investment, and unprofitable infrastructure projects cannot attract private capital investment. Using PPP model, the government can give private investors corresponding policy support as compensation, thus solving this problem well, such as tax incentives, loan guarantees, giving private enterprises priority in developing land along the route, and so on. By implementing these policies, the enthusiasm of private capital to invest in urban rail transit projects can be improved.
PPP mode can improve the service quality of urban rail transit on the premise of reducing the burden and risk of government initial construction investment. Under PPP mode, the public sector and private enterprises jointly participate in the construction and operation of urban rail transit, and private enterprises are responsible for project financing, which may increase the capital amount of the project, thus reducing the excessive asset-liability ratio, saving the government's investment and transferring some project risks to private enterprises, thus reducing the government's risks. At the same time, the two sides can form a long-term goal of mutual benefit and better serve the society and the public.
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