What does BT mean in the hotel industry?

BT mode is a build-transfer mode. It has been gradually applied to urban infrastructure construction in China, and it is a way of investment and financing for infrastructure construction by the government using non-government funds.

This model can effectively mobilize domestic and foreign private resources through policy guidance and interest-driven measures, solve the problem of insufficient funds for government infrastructure construction, alleviate the financial pressure of the government, and achieve a "win-win" between the government and private resources. However, the construction process of BT mode involves a series of processes such as financing, construction and handover.

Participants, including project owners (government), BT project investors, loan banks or other relevant units, have formed a significant law enforcement relationship, and there are many factors that cause risks in project operation. Therefore, it is the key to analyze the risks of BT project, allocate and manage the risks reasonably, and make the project go smoothly.

Risk analysis of BT mode

Risk refers to the uncertain factors in the process of project implementation. The unique risks under BT mode can be divided into political law enforcement risk, financing risk, project approval risk, completion risk and project repurchase risk.

1, political law enforcement risk

Because the BT model has not been used for a long time in China, the responsive guiding law enforcement cases are still in the stage of perfection, which leads to the vacancy of law enforcement in this field, so we can only refer to other relevant law enforcement cases. However, the treaty and financing structure involved in the project under BT mode are more important, which means that the impact of law enforcement risks on the project should be fully considered in the operation process.

2. Financing risk

Financing risks are mainly divided into two situations: investment exceeding budget and rising financing cost. Its occurrence is mainly due to the investor's financing ability and the change of economic policy in the process of project construction. Therefore, investors should fully consider their own financing ability, project scale and loan requirements of financial institutions before bidding, and formulate standby financing plans with investment exceeding budget. In view of the rising financing cost, the disposal plan should be agreed through financing agreement or BT supplementary agreement to transfer risks.

3. Risk of project approval

BT project approval can be divided into project approval, BT mode implementation plan approval and BT project supporting documents approval. Project approval includes environmental assessment, land exercise design, project approval and other issues, which are closely linked, and any link problem will lead to project failure.

The BT Mode Implementation Plan stipulates the owner, the repurchase method, the repurchase period and the funds for executing the project on behalf of the government. Since the repurchase funds of BT project come from government financial funds, the smooth operation of BT project needs to ensure that BT project is approved by the National People's Congress and relevant administrative organs, and form responsive documents and policy support.