How should urban infrastructure construction companies operate?

In the past ten years, in order to change the construction investment and management mode under the planned economy, revitalize urban assets and operate cities according to market rules, urban investment companies came into being. The effective operation of the city investment company has contributed to the construction and development of urban infrastructure. However, in some cities, especially those where the reform of urban investment system has just started, the development of urban investment companies is also facing many misunderstandings and difficulties. As an important part of urban investment and financing system reform, the sustainable development of urban investment companies is closely related to the success of urban management strategy. Development Status of Urban Investment Companies Due to different operating time, marketization degree and innovation consciousness, China's urban investment companies are mixed, and some companies have established diversified financing systems and entered a virtuous circle. For example, Ningbo City Investment Company has begun to operate capitalization. And some city investment companies are on the verge of bankruptcy by borrowing money to make a living. As far as the newly-built city investment company is concerned, it faces many problems that big bosses once faced. How to learn from the successful experience of other countries, straighten out the relationship with the government, solve the contradiction of funds and shorten the "pain period" as soon as possible will be the key to its survival. The payback period of funds is too long and the use efficiency is low. As a profitable or quasi-profitable investment project, it generally goes through a process of investment (lending) → operation → recovery → repayment (profitability) → reinvestment. In some cities, funds have passed through the checkpoints of many departments, which not only reduces the quantity and greatly reduces the efficiency of use, but also prolongs the recovery time, increasing the pressure on enterprises to invest again. For example, in some cities, the land auction project mainly undertaken by the city investment company takes at least one year from the establishment of the Planning Commission to the arrival of the land transfer fee after the land auction. Such a long turnover period has bound the hands and feet of enterprises to reinvest in development. The financing channel is single and the debt ratio remains high. The management right of urban construction assets invested by the government has not been fully implemented, which leads to the imperfect financing function of urban investment companies, and most of the external financing is in the form of long-term and short-term commercial loans from banks. On the one hand, due to the low income of some urban construction projects, banks are becoming more and more cautious in lending. On the other hand, the asset-liability ratio of urban investment companies is getting higher and higher, and it is difficult to guarantee debt repayment. Therefore, continuing to rely on debt financing is not only difficult to meet the growing demand for construction funds, but also threatens the sustainable development of city investment companies. Project construction still adopts the management mode of planned economy. At the beginning of the establishment of the City Investment Company, some city governments could not get rid of the management mode of planned economy, which showed as follows: the government directly participated in economic activities, paid more attention to construction than management, paid more attention to image than management, unified revenue and expenditure in financial system, and highly concentrated funds. All expenditures, regardless of the size of the project, must be carried out in accordance with the plan. Even if the actual situation changes, additional or adjusted funds must be adjusted according to the plan, and the cycle is long. On the one hand, urban construction projects rely too much on financial investment, on the other hand, the funds invested by the financial department lack supervision, and the investment efficiency of capital users is poor, and there is no circular investment system for capital flow, which hinders the cultivation and development of the market system. The decentralization of urban infrastructure construction departments, management and funds has hindered the process of establishing a diversified financing system for urban investment companies. Because the government is still directly involved in urban management activities in accordance with the planned economy model, in order to mobilize the so-called enthusiasm of all parties and raise funds in many ways, urban construction infrastructure projects are often entrusted to multiple departments, ensuring the project funds and progress in a short time. However, in the long run, the dispersion of capital, manpower and management brought by it is not conducive to the diversified financing attempts of urban investment companies, such as capitalization operation, absorbing private funds, revitalizing urban construction stocks, and borrowing at home and abroad. The dispersion of capital and manpower will make the city investment company have to go through a slow primitive accumulation process from small to large like big brother, instead of standing on the shoulders of giants and exploring diversified financing systems from a high starting point with huge assets. Function Orientation and Business Development Direction of Urban Investment Company Under the planned economy system, the government is not only the decision-maker of urban construction, but also the operator of urban assets, and also the manager and coordinator of urban assets. In order to solve the contradiction between the serious shortage of urban construction funds and the low construction efficiency under the planned economy system, although some cities have carried out the reform of urban construction management system, they still continue this habitual thinking in practice and manage urban investment companies according to the old ideas. Therefore, urban investment companies are actually the functional departments of government urban construction. As a result, the city investment company can't get rid of the planned management mode of emphasizing construction and neglecting management. On the one hand, it bears a heavy economic burden, on the other hand, it is impossible to establish a diversified investment system. Therefore, in order to get rid of the obstacles in the operation of city investment companies, we must abandon the old concepts and models, and make clear the positioning and development direction of city investment companies in urban management from the perspective of urban management. Function orientation of city investment company. The so-called urban management aims at urban development, social progress and the improvement of people's material and cultural living standards, reorganizes and operates land capital, human capital such as roads and bridges, and related extended capital such as naming rights of roads and bridges in cities through market mechanisms, and changes the situation that the government only builds municipal facilities, does not operate, and only invests without income under the planned economy, and takes the road of building cities. This definition defines the "role" of the government and the city investment company in the city management strategy. The government should exercise the functions of planning, project approval, supervision and management of urban infrastructure construction, and basically hand over the investment of urban infrastructure projects to the market subject representing the government, that is, the city investment company. The fundamental task of city investment company is to continuously improve the investment and operation efficiency of urban infrastructure and promote the healthy development of urban construction. This positioning defines two tasks of the city investment company: one is to build urban infrastructure, and the other is to manage and operate urban infrastructure according to market rules. Management and development direction of city investment company. First of all, the city investment company should be the main body of urban construction investment and financing. As the main body of urban infrastructure investment and financing, city investment company should change the government behavior of decentralized investment and management of various departments under the planned economy into the corporate behavior of holding company integrating financing, investment, construction and operation, and completely solve the problem of unclear responsibility and right in urban infrastructure investment and operation, and the separation of government from enterprise. According to the different nature of urban construction projects, urban investment companies should operate urban construction funds in different ways, such as profit, quasi-profit and non-profit. Public welfare, quasi-operational urban infrastructure projects are mainly funded by the government, and the investment function is exercised through the city investment company. The insufficient part is raised and operated by the city investment company. The government's financial urban construction funds, land income and bridge toll can be used as a guarantee to repay debts; The construction of commercial urban infrastructure projects can be initiated by the city investment company to attract diversified investment, and can also be invested by other investors, which can make the city investment company get rid of the tedious daily management affairs, such as an old city demolition project, and can entrust the development company or other project companies to operate. Secondly, the city investment company should be the main operator of urban construction assets. After long-term investment, a large number of urban construction stock assets have been formed, accounting for a considerable proportion of urban assets. In the past, the government or competent department was both an investor and an operator. In fact, there is no clear owner of these state-owned assets, which often leads to the construction in full swing. After the completion, the management is weak and unattended, which requires a lot of urban construction maintenance subsidies. Now with the concept of market economy, most urban construction assets can not only form new output, but also make use of market means to revitalize existing assets. Taking city investment companies as the main body and using market means to operate urban construction assets can not only solve the problem of insufficient funds for urban construction, but also improve the operation efficiency of urban construction assets, form a virtuous circle of input and output of urban construction assets, and promote the sustainable development of urban infrastructure construction. The development of city investment company focuses on establishing the supervision mechanism of urban construction funds. Nowadays, many urban construction projects are operated in debt, so it is particularly important for the government to supervise the financial affairs of urban investment companies. On the one hand, the government should establish a standardized investor system and strengthen the investment management of the project. On the other hand, it is necessary to establish an effective and feasible fund supervision system and a necessary debt early warning system to control debt risks. Establish the return ratio of capital use, regularly check the capital recovery cycle, check the efficiency of capital use, strengthen the audit of project input cost, mobilize the initiative and initiative of urban investment companies, so as to obtain the best investment benefit and completely change the status quo of "heart to heart" and "back to back" between the government and urban investment companies in project construction. Establish the main position of city investment company in the operation of urban construction assets. The government should first make clear the positioning of urban construction investment companies in urban construction asset management, put the management right in place, and create conditions for establishing a diversified financing system including capital operation. It is necessary to change the situation of decentralized management of urban construction assets in the past, strengthen the main position of urban investment companies, and hand over the urban assets (including natural capital, human capital and related extended capital) and supporting funds for urban construction projects arranged by the government in history to urban investment companies; Unified management by the city investment company, revitalize the stock, and use the proceeds for urban infrastructure projects. Cultivate profitable urban infrastructure projects. Carefully sort out the three types of capital handed over by the government to the city investment company, thoroughly investigate and cultivate profitable projects, and solve the contradiction of capital demand. By constantly cultivating high-yield projects, we can maintain the company's sustainable financing ability, reduce the company's asset-liability ratio, shorten the capital recovery cycle, and improve the efficiency of project funds. This is the key direction of the development of city investment company. Increase the cash flow of the city investment company. The financial urban construction funds are operated by the city investment company in a unified way, giving full play to the maximum benefit of limited funds. In capital operation, maintaining a reasonable proportion of physical capital and monetary capital is the premise of maintaining capital liquidity and realizing capital appreciation. As far as city investment companies are concerned, liquidity has no advantage. On the one hand, it can greatly alleviate the problem of insufficient working capital of city investment companies, reduce loan interest expenses and reduce debt ratio. On the other hand, the city investment company will operate and turn the funds into capital, and the utilization efficiency of funds will be greatly improved.