Research On Equity Structure And Specialized Company’s Effort Level Of PPP Projects

Public-private partnership (PPP) implemented more than thirty years in our country. As China published formal documents, encouraging infrastructure projects to use private capital. All of these indicate that PPP model usher in the golden period of development. With the development of the PPP model, more and more professional companies (contractors, operators, suppliers, etc.) become the second stakeholder of the project company, hoping to get more benefits through "Investors-Professional Company" multiple identities (in this article such professional company is called a multi-role party).In this paper, the author discuss the "Investors-professional company" overlapping roles scenario in PPP project company, analysis investors and professional company’s earnings under different ownership structure of the project company. At the same time, the author intends to find the best ownership structure of the project company. The author hopes to provide a good reference for investors and professional companies. The equity structure of project company varies with multi-role party’s different invest proportions, as is to the overall project benefits (in the article, equity structure is totally based on investment ratio). At the same time, the effort level of multi-role party affects the overall project benefits, which affecting investors’benefits and multi-role party’s benefits. When equity and effect level are changing together, benefits will become much more complex.This paper first analysis the deeper meaning of PPP model and identify the various stakeholders. Dividing the PPP project into different stages and combing stakeholders and key aspects involved in the different stages. The author builds "Investors-Contractors", "Investors-Suppliers", "Investors-Operators" multiple identities scenarios. And the author uses multi-role party’s effort level to build project company’s equity structure and income functions. By comparing benefits of each equity structure, the author analyses possible choices for investors and multi-role party and gives the necessary conditions to achieve the "professional company have shares of the project company and work hard" scenario.