What Is TOT Financing?

TOT is the abbreviation of "handover operation pfer" (Transfer-Operate-Transfer). It is a form of project financing, specifically referring to the pfer of the pportation infrastructure projects that have been put into operation to foreign businessmen after signing the franchise agreement with foreign investors. With the proceeds of the facility in the next few years, a sum of money will be absorbed from the foreign businessmen to build a new pport infrastructure project at once. After the franchise expires, the foreign businessmen will pfer the facility to the Chinese side without charge.

Therefore, the fundamental difference between TOT mode and BOT mode lies in "B", that is, it does not need to be directly invested by foreign businessmen to build pport infrastructure, thus avoiding a large number of risks and contradictions arising from the "B" segment. It is easier for both sides to reach agreement.

In the present stage of China's economic development, it is particularly necessary to adopt TOT mode and develop direct financing.

TOT advantage analysis: 1, TOT financing involves only the pfer of management rights, there is no dispute over ownership and equity.

The pport infrastructure is financing by TOT mode. The pfer is only the right to operate in the franchise period. It does not involve the sensitive issue of property rights and stock rights. It cleverly avoids the problem of the loss of state-owned assets, guarantees the government's control over the pport infrastructure, and is easy to meet the special economic and legal environment requirements of our country.

Therefore, it is easier to promote under existing conditions.

2 is conducive to revitalizing the stock of state-owned assets, raising funds for new pport infrastructure and speeding up the pace of pportation infrastructure construction in China.

One of the ways to use TOT financing is to store the stock assets of pport infrastructure and realize the preservation and increment of state-owned assets. Second, it is to integrate funds for the proposed new pport infrastructure projects, alleviate the contradiction between shortage of funds and speed up the construction of pport infrastructure; third, the entry of foreign capital increment, which is conducive to improving the overall quality and quality of the state-owned economy.

3 is conducive to improving the technical management level of pportation infrastructure and speeding up the modernization of pportation in China.

The adoption of TOT financing to introduce foreign capital can break the state's monopoly on pport infrastructure, and help to gradually establish an open, orderly and fair pportation infrastructure market, and speed up the marketization process of China's pport infrastructure.

TOT's attention will be serious enough. Our pport infrastructure will still be seriously insufficient for a long time. It has broad market prospects and will be more attractive to foreign direct investment.

Therefore, while actively encouraging foreign investors to invest in pportation infrastructure projects with TOT financing, we should also pay attention to the following aspects: 1, strengthen the research on specific policies of TOT financing.

It is necessary to organize relevant departments and experts to study the specific policies of TOT financing as soon as possible, such as the deadline of TOT projects. It is necessary to ensure investors' return on investment and reasonable profits, as well as to ensure the national income. The duration of different projects may be different, so we should study the corresponding countermeasures in general.

As the price of TOT project is concerned, the rate of return on investment is closely related to the price of project or service. A set of guiding principles and methods that can be used to determine the charging standard and price adjustment mode of major pport facilities should be worked out to provide basis for price management at all levels of government.

2, expand the basic environment and conditions for the operation of TOT mode.

The TOT mode has broad market development prospects under the current economic conditions in China.

However, the existing policies and regulations are not targeted enough, some are not clear enough, the operability is poor, and some policies and regulations are not well coordinated, which affects the enthusiasm of foreign investors in pportation infrastructure investment.

First, the government should formulate and improve policies and regulations for the pport infrastructure projects for foreign investment in construction and operation as soon as possible, and ensure the continuity and stability of the use of the pport infrastructure and franchise rights, guarantee the legitimate rights and interests of investors, minimize the legal risks and political risks of foreign investment, and eliminate the unnecessary doubts of foreign investors.

Secondly, the government should continue to implement preferential policies for foreign investment in pport infrastructure. We should adopt a flexible and pragmatic attitude towards the reasonable requirements of foreign businessmen, and make appropriate commitments based on thorough investigation and careful calculation, so as to reduce the risk of foreign investment.

Thirdly, for some pportation infrastructure projects which are important for economic and social development, but only by collecting royalties can not be recovered or investment return rate is too low, the government should further relax the policy, allowing investors to invest and develop and operate related rights such as tourism, advertising, real estate and other projects in the surrounding areas along the lines of communications or pportation facilities, so that investors can compensate the project investment with the proceeds of these projects.

3, TOT as a way of introducing foreign capital, it is mainly facing foreign investors, but in fact, it does not exclude the participation of private enterprises, financial institutions and fund organizations in China.

TOT financing provides an opportunity for China's growing private capital to enter the infrastructure such as pportation. This will help to make full use of domestic resources, readjust the industrial structure and optimize the allocation of resources. At the same time, it also provides experience for domestic private organizations to accumulate investment and operation of pportation basic industries, and lay a good foundation for the gradual marketization of the pportation infrastructure industry.