Wei Nan Municipal Heat-supply PPP Model Design

Along with the urbanization process and the deepening reform of the system for heat-supply, a major number of cities have used centralized heat-supply on several levels, thus the nation's consumption of heat is ever growing. After sponsoring dozens of infrastructure projects for years, central and provincial government found it hard to achieve the goals that increase the heating capacity as well as reduce the pollution. Normally, the municipal heat-supply is profitable, the low rate of return and long payback period cause limited financing channel and inefficiency despite its considerable input. A short of funds is preventing the government from developing heat-supply engineering construction.Basically, this paper focuses on the Wei Nan Municipal Heat-supply project, while presenting the definition of Public-Private-Partnership (PPP) through a study of fund raising theory and practical experience. Case study, data analysis, model evaluation had been employed for this research, which shows both pros and cons of adopting the PPP model.The beginning chapter of this paper prefaces an introduction on the purposes, methods, range and value of the research. The second chapter summarizes the theoretical studies of PPP model. Illustrative examples are given to show the advantages and disadvantages of PPP model used in municipal heat-supply. The third chapter presents planning situation and recent trends of Wei Nan Municipal Heat-supply, draw out the key facts about the financing plan. The fourth chapter discusses several aspects of PPP models design, such as basic structure of the model, operational procedures, expectations for private sector, terms of franchising and safety measures etc., based on the progress of the project and financing scale. The final chapter gives a result of the detailed modeling, which calculates the tolerance of Wei Nan's government receipts & expenditure, using analytic hierarchy process (AHP) and value for money (VFM) methods.At last, theoretical studies together with demonstration analysis are performed throughout all this paper, validating the claim of adopting PPP models in comparatively lagged infrastructure financing. This paper not only confirms the feasibility of Wei Nan Municipal Heat-supply PPP model, but also promises government a diversified financing channel.