What is ppp mode and what are its advantages?

PPP(Public-Private Partnership) is also called PPP mode, that is, the cooperation between government and social capital, which is a project operation mode in public infrastructure. Under this model, private enterprises and private capital are encouraged to cooperate with the government and participate in public infrastructure construction.

1, PPP refers to the cooperation between the public sector and the private sector of the government, so that the resources mastered by the non-public sector can participate in the provision of public goods and services, thus achieving more favorable results than expected.

Compared with BOT, the main characteristics of narrow sense PPP are that the government is more involved in the construction, management and operation process in the middle and late stage of the project, and enterprises are more involved in the scientific research and project establishment in the early stage of the project. 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.

2.PPP is the abbreviation of Public-Private Partnership, which means that in the field of public services, the government chooses social capital with investment and operation management capabilities in a competitive way, and the two parties conclude a contract on the principle of equal consultation, and the social capital provides public services, and the government pays consideration to the social capital according to the performance evaluation results of public services.

3.PPP provides services in the form of market competition, mainly in pure public and quasi-public fields. PPP is not only a means of financing, but also a system reform, involving administrative system reform, financial system reform and investment and financing system reform.

Extended data

Main advantages

1, eliminating cost overruns. In the initial stage, the public sector and private enterprises, private enterprises and the government jointly participate in the project establishment, feasibility study, facilities, financing and other project construction processes, which ensures the technical and economic feasibility of the project, shortens the preliminary work cycle and reduces the project cost.

2, is conducive to the transformation of government functions, reduce the financial burden. The government can get rid of the heavy work and change from the provider of infrastructure services in the past to the role of supervisor, thus ensuring quality and reducing the pressure on the government's budget.

3. Promote the diversification of investment subjects. Using private sector to provide assets and services can provide more funds and skills for government departments and promote the reform of investment and financing system. At the same time, private sector participation in the project can also promote the innovation of project design, construction and facility management processes, improve work efficiency and spread the best management ideas and experiences.

4. The government and the private sector can learn from each other's strong points, give full play to their respective advantages and make up for each other's shortcomings. The two sides can form a long-term goal of mutual benefit and provide high-quality services to the public at the most effective cost.

5. Integrating all parties involved in the project and forming a strategic alliance play a key role in coordinating the different interests of all parties.

6. Reasonable risk allocation. Different from BOT and other modes, PPP can realize risk sharing in the early stage of the project. At the same time, because the government shares some risks, the risk distribution is more reasonable, which reduces the risks of contractors and investors, thus reducing the difficulty of financing and improving the possibility of successful project financing. While sharing risks, the government also has certain control rights.

7. It has a wide range of applications. This model breaks through various restrictions on the introduction of private enterprises to participate in public infrastructure projects, and can be applied to urban heating and various municipal utilities such as roads, railways, airports, hospitals and schools.

Baidu encyclopedia -PPP mode