Application Research On PFI Model In Yunnan XX Pension Type Hotel Project In China

With the accelerating urbanization,the growing needs for infrastructure and housing,as well as the necessity to narrow the gap of historical urban construction,the demand for urban engineering projects is rapidly rising in China.However,the traditional engineering construction and management model can hardly meet the need for socio-economic development,and the government investment is faced with the challenges of severe waste,low efficiency and great risk.Therefore,it has become a hot topic in economics study over the recent years to address the funding source of engineering construction and expanding of financing source under the new circumstances in the country.BOT(Build-Operate-Transfer)model,a form of project financing,has already attracted wide attention in the world.Nevertheless,it is only applicable to the projects that involve large investment,long term of construction and slow return of investment.Therefore,it is important to change the concept on BOT financing model in order for the private investment and local government to narrow their gaps.In this paper,the author proposes a new model,Private Finance Initiative(PFI)to address this problem.It reviews the current status of engineering projects in China,and then presents the major advantages and feasibility of this model.PFI(Private Finance Initiative),an effective way of funding public projects with private capital,has been actively promoted in some developed countries such as UK,and Japan,thus achieving good economic and social benefits.In China,the robust demand for investment of public projects(particularly in the central and western regions),shortage of financial budget and large amount of private capital remaining idle all make it necessary and practical to develop PFI.As a matter of fact,the number of PFI projects i s steadily increasing over the recent years.However,no planning or institutions on PFI have yet been put in place,posing major risks to the healthy development of PFI in the country.Under such context,the paper attempts to address the application of PFI in engineering construction projects in China by studying the fundamental theories on PFI and the best practices in developed countries and by integrating the actual conditions in China.From a point of view of financing model in construction projects,the paper addresses the advantage of PFI model in financing by taking the Pension type hotel project in Anning City,Yunnan Province,China as a case study.The author also provides theories on applying the operation process of PFI model.