On The Application Of Asset Backed Securitization In PPP Projects

As the policy of Reform and Opening up keeps deeper and deeper in China and the progress of urbanization speeds up,the demand of investment in the social public infrastructure construction is also increasing.All this creates a great pressure to the fiscal expenditures of government.While the adopt of Public-Private Partnership(ppp)in the construction of social public infrastructure can efficiently help the government solve the problem of increasing fiscal expenditure,it takes a more and more important role in the progress of urbanization.Not only does the national government introduce relevant polices to support the development PPP mode,but also the local governments take positive attitudes towards the promotion of PPP mode.As the result,the size of using PPP mode in the construction of social public infrastructure is larger and larger.However,accompanying with the high-speed development of PPP mode in our country is the increasing demand for the capital from the public sector.The investment in a common program using PPP mode is at least one billion yuan and sometimes more than ten billion yuan,and in the meanwhile,all this infrastructure construction project has the problem of long time of construction period,difficult to construct and a long payback period.Because of the restriction of these problems,the public sector doesn't take an active part in the PPP projects.So how to help the public sectors exit the project during the duration and enhance the liquidity of the asset so as to boost the public sector's enthusiasm in the participation in PPP project is the key to the healthy development of PPP mode in our country.From this point of view,this article is based on the theory of asset backed securitization,exploring the feasibility analysis and specific mode that can be used in the PPP project.And through case study discussing the problems that may occur in the progress of securitization,then put forward the solutions.This article is going to describe the background and meaning of choosing this topic,purpose of the study and the methods that will be used in this article.Then comes the summary of the research that conducted by the scholars on the PPP mode and asset backed securitization.This section mainly discuss the fundamental theory of PPP mode and asset backed securitization,including the specifications and categories of PPP mode,the definition?operational flow?specifications and advantages of asset backed securitization.And finally combines the specifications and advantages of both PPP mode and asset backed securitization to discuss the necessity and feasibility of the use of securitization in the area of PPP mode.On the base of research on the PPP mode and asset backed securitization,the key part of this article is using the program of Beijing Metro Line Four as the example to discuss the feasibility of PPP program to be the fundamental asset on the progress of securitization.Then forecasts the future cash flow of Beijing Metro Line Four and establishes the asset pool.At the same time,this article takes the construction of Special Purpose Vehicle(SPV)?the methods of credit enhance into account,in order to figure out what is best for the PPP program.And finally puts forward some advice to the better development of asset backed securitization on PPP mode in the future.