The basic meaning of BT is that after the project company has passed the general contracting, financing, construction and acceptance, it will hand over the operation of a project to the government, and then the government will pay the infrastructure costs in installments and use compensation measures.
For most infrastructure construction projects, especially public welfare infrastructure projects, social funds can be attracted for construction according to BT (Build-Transfer) method, and the government can repay investors through compensation mechanism and repurchase.
BT mode operation:
1. The government starts the project according to the needs of local social and economic development, completes the preliminary work such as project proposal, feasibility study, planning and approval, and transfers the project financing construction concession to investors (legally registered state-owned or private construction enterprises).
Banks or other financial institutions provide financing loans for the project according to the future income of the project and the economic strength of investors. The government signs a BT investment contract with the investor, and the investor forms a BT project company. During the construction period, investors exercise the functions of owners, finance construction projects and bear the risks during the construction period.
2. After the completion of the project, according to the BT contract, the investor will hand over the project that has passed the completion acceptance to the government, and the government will repay the investor's financing and construction expenses in installments according to the agreed total price (or total measurement price plus reasonable return).
3. The government supervises the whole process of BT investment to ensure the smooth financing, construction and handover of BT investment projects. Whether the investor has the strength suitable for the project scale is the key to the smooth construction and handover of the BT project.