Research On The Application Of Government Investment Fund In PPP Project

In the background of unprecedented enthusiasm of local governments to promote PPP projects and difficulties in financing PPP projects,fund tools attract the attention of central and provincial departments with their advantages of lower financing threshold,flexible ways of raising capital and unique leverage effect.In November 2015,the Ministry of Finance promulgated the document : <the Interim Measures for the Management of Government Investment Funds>,which put forward the concept of Government Investment Funds and regulated the establishment,operation and risk control,termination and withdrawal,budget management,asset management and supervision and management process of the funds.Government investment funds also have gained further development toward the direction of marketization and diversification.Since then,many local governments have promulgated relevant policy documents,actively exploring the operation mode which is suitable for the development of the region,these explorations have promoted the transformation and upgrading of regional industries and accelerated economic development.However,there are also many problems in the application of government investment funds in PPP projects,such as unbalanced regional and field distribution of fund investment,unclear investment mode and single exit mode,the contradiction between public welfare of government funds and profitability of private capital.On this basis,this paper analyzed the application process of government investment funds in PPP projects in order to provide reference for the future use of fund tools in PPP projects.Firstly,this paper introduces the relevant concepts of government investment funds,and elaborates the relevant theoretical basis,including private equity fund theory,project financing theory,investment theory and real option theory,to provide theoretical support for the follow-up analysis.Secondly,this paper analyses the mode of government investment funds in PPP projects,including the feasibility and existing problems,investment methods,capital composition,proportion and investment structure of government investment funds in PPP projects,providing realistic background for the analysis of this paper.Thirdly,on the basement of literature analysis,policy document analysis and relevant case analysis,this paper extracts the influencing factors of government investment fund’s investment to PPP projects,including compliance factors,policy factors and profitability factors.Then,in order to clarify the application process of government investment funds in PPP,this paper constructs the suitability evaluation index system of government investment funds in PPP projects,including qualitative evaluation index and quantitative evaluation index.In this paper,factor analysis method is used to construct the quantitative evaluation model of government investment funds applied to PPP projects,and determine the quantitative evaluation criteria.Referring to the idea of value for money evaluation of PPP projects,this paper clarifies the qualitative evaluation method and evaluation criteria for the application of government investment funds to PPP projects,and thus obtains the investment boundary for the application of government investment fund’s investment to PPP projects.Subsequently,this paper evaluates the project value of PPP project at the end of its operation period by using three models of real options.On this basis,this paper analyzed the withdrawal modes of government investment funds in PPP project,and further explains the boundaries,scope of application and specific types of withdrawal modes to construct a complete framework for the application of government investment funds in PPP project.Finally,the PPP project of the first phase of the S1 line of Taizhou Railway in Zhejiang Province is selected as a case to verify the above analysis process.