The Research Of ABS Application In PPP-based Quasi-public Goods

The urban population in developing countries will account for three fourthsof the total urban population in the world till2015. It will cause huge increase inthe needs of quasi-public goods. Traditionally, the main capital resource ofquasi-public goods, especially the infrastructure construction came fromgovernment fiscal funds. With the increasing of infrastructure demand, the risingmaintenance cost and tight budget, governments started to seek for new capitalsources from private enterprises.PPP, public private partnership has become an innovation mechanism withthe fastest growth rate in the field of infrastructure and public service supplyduring the last ten years. It not only relieves the constraint of governmentfinancing in the aspect of infrastructure construction, but also takes advantage ofprivate sectors to lower costs of building and operation. Thus, it achieves highereconomic efficiency. With the deepening reform of Chinese investment and financing and confronting the relief of European debt crisis, considerableinfrastructure demands will be brought and PPP project will have widerapplication.However, PPP project will put great stress on financial state of privateparticipants in a long term and make them unable to invest on new PPP projects.Due to the low capital turnover rate, it causes a gradual decrease in market share,competitiveness and profitability of their core business. Researches on how torevitalize the PPP project through asset-securitization and improve the currentsituation for each participant become more and more important.Using literature searching and reading method, this thesis makes ananalysis from the theories of PPP and asset-securitization. Moreover, itintegrates the concept of Pareto Improvement which is used for optimizingresources allocation.The thesis aims at Pareto Improvement for PPP project throughasset-securitization. It designs a series of working flow and eight steps for realoperation using qualitative research. It also estimates the benefits of originalowner, investors and government respectively using quantitative research.Finally, it creates a Pareto Improvement model based on PPPasset-securitization.This thesis exemplifies the first successful trial case of Pudong BT project.It analyzes the specific “eight operation steps”. Moreover, the thesis collects andestimates data of deposit rate, loan rate, asset-liability ratio, earnings rate etc. According to the result, the Pareto Improvement model is proved to be effective.The thesis indicates that PPP asset-securitization can be beneficial to threeparticipants if it is well-designed. Finally, this thesis provides some suggestionson relevant legal system, risk prevention mechanism and service level of agents.