The so-called BT model, if explained in the most formal and official terms: construction-transfer (BT) model, is a financing model in which the government uses social funds to carry out non-operating infrastructure construction projects, which refers to the process of a project's operation being handed over to the government or the owner after the financing and construction acceptance are passed through the general contracting of the project company, and the government or the owner pays the total investment of the project plus a reasonable return to the investor.

Well, this explanation sounds like it's really a cloud and mountain fog cover and seems to be full of force, don't be confused by this explanation, of course, the BT mode is not so lofty, if you use the most easy-to-understand and most straightforward language to explain the essence of the BT mode, this thing is actually just a few words:

Advance funds to do engineering!

That's right, that's the truth of the matter. Therefore, Li Huayong has always had a kind of awe attitude towards the so-called economists or people in the financial circles, for example, in this example, they can give the most complex explanations for things that are obviously very simple.

Of course, although the essence of the BT model is simple, its significance is extraordinary, and Li Huayong even believes that for China's construction industry, there is really not much that can have a greater impact on the entire industry than the BT model.

There are good and bad aspects of these impacts, both positive and negative, but no matter which aspect of the impact, the entire industry has changed profoundly.

First of all, the emergence of the BT model has changed the nature of the entire construction industry a little bit, and it seems to have improved the status of the entire industry in society.

As we all know, in our country, in the past, the construction industry was relatively simple, you had to build a house, and then you hired me to do things for you. The relationship is simple and direct, and the entire construction industry can be positioned as a "worker".

However, with the BT model, it is different, because the essence of the BT model is actually to advance funds, you can think about it, for a project, or even for any economic activity, if people bring capital into the market to play this game, the nature must be different, at least you can no longer treat people as pure "workers" to see, right?

This is the first impact that the BT model has brought to the entire construction industry.

The second impact can be considered that it is the emergence of the BT model that has greatly promoted the development of private construction enterprises.

Although Li Huayong has been in state-owned enterprises in his last life, he has been like this in this industry, and he has also been in contact with many private enterprise peers. To be honest, our country's private construction enterprises have indeed gone through a relatively difficult road of development. Because during this period, there is a problem that has plagued private enterprises for a long time, that is, the qualification of building construction.

It is common sense that everyone knows that relevant qualifications are required to participate in project bidding, and in this regard, private construction enterprises have congenital deficiencies. Because of the acquisition of construction qualifications, under normal circumstances, it is really not something you can do if you have money, you have money to recruit enough construction technicians, and you have money to buy enough construction equipment. However, if you want to qualify, this is not enough.

Because in our country, and even in the global construction industry, if you want to have a certain level of construction qualification, then you must have relevant performance.

For a simple example, do you want to have the "first-class housing construction" construction qualification, then how many civil buildings you have done, and even how many square meters of construction area you have completed in recent years, such performance is a hard indicator when assessing qualifications.

Li Huayong had come across such an example in his previous life, once there was a civil construction project near the project he was involved in, and the construction company of that project was a state-owned enterprise mainly engaged in industrial construction. After dating a few times, Li Huayong had a good relationship with the project manager of that project, and once after occasionally seeing the list of quotations for the construction contract of that project, Li Huayong felt strange, and he asked the colleague:

"With such a low offer, aren't you afraid of losing money?"

The colleague told Li Huayong the reason with a bitter face, when they did the preliminary calculation, of course, they also knew that such a price would definitely be a loss, but there was no way, their units were usually mainly industrial buildings, and civil buildings were originally done less, in order to keep the civil construction qualification just obtained a few years ago, then there was no way, in order to complete the specified performance, they knew that they had to do this project at a loss.

Li Huayong laughed, he patted the colleague on the shoulder: "Yes, yes, you should be regarded as a "policy loss", so that your life should be better, because even if you lose the board, it will not hit you." ”

The colleague smirked: "That's right." ”

It is entirely conceivable that this is not the case for state-owned enterprises, and even more so for private enterprises if they want to obtain qualifications. And for well-known reasons, our country has private enterprises very late, so in this regard, private construction enterprises are almost at the beginning out of natural disadvantages.

If there is no performance, you will not be able to obtain relevant qualifications, and if you do not have qualifications, you will not be able to participate in the bidding, and if you can't participate in the bidding, it will be more difficult to complete the specified performance. This seems to be a dead cycle, and it is such a problem similar to a dead cycle that has plagued domestic private construction enterprises for a long time.

It is the emergence of the BT model that solves this problem that has plagued private construction enterprises for a long time.

"You say I don't have the qualifications, and I won't be allowed to do this project, right? So what about my advance, if I am willing to advance, can you consider it...... ，”

It is precisely for this reason that for a period of time in China, the BT model or advance funds to do projects has become popular in the industry, especially in Jiangsu and Zhejiang, where the private economy is developed, almost to the point that you will not be able to receive the project without advance. Correspondingly, when this model first appeared, most state-owned construction enterprises were very resistant to this model, such as Li Huayong's unit in his previous life, which clearly stipulated for a long time that projects that needed to be advanced would not be accepted. It's just that I can't help it until very late, especially after there are more overseas projects, in fact, quite a lot of overseas projects are similar to this model, so I slowly adapt to the situation.

The above is the second impact of the BT model on the entire construction industry.

Although he has said so much, Li Huayong thinks that if the BT mode only has these two effects, it will be nothing, and you should still be the third feature of the real power. So what is this feature?

Li Huayong believes that this model is highly in line with the characteristics of domestic economic development.

How powerful is this model? In real history, a very realistic example may be very revealing.

In real history, just before Li Huayong crossed, it should be said that our country has developed to a certain extent, the world's second largest economy, including the construction industry, the traditional manufacturing industry has already surpassed the United States to rank first in the world.

Taking the construction industry that Li Huayong is familiar with as an example, just before he crossed over, 7 of the world's top 10 general construction contractors with international general contracting qualifications were our Chinese construction enterprises. Even the 1st to 5th place are all Chinese companies, only the 6th is a German company, the 7th is an American company, and the 10th is a Japanese company.

So an interesting question arises, among so many awesome companies, which company ranks first? The answer may be beyond many people's expectations, this No. 1 construction company is not the famous "Huaxia Construction General" in the field of civil construction, nor is it a giant in the construction field of China Railway, China Communications, China Metallurgical and other industries. It is a private enterprise with an inconspicuous reputation, a poor reputation, and even a bit of a stinky reputation.

Even such a private construction enterprise, around 2010, in the domestic "top 500" ranking, crushed all domestic construction peers, crushed all domestic real estate enterprises, it even crushed "PetroChina", "Sinopec" these monopoly industry enterprises, crushed all Internet enterprises, only located in the "universe" known as ICBC, ranking second in China.

That's right, this is the private construction enterprise located in Jiangsu Province that has been doing BT mode until now, and the founder is known as the "originator of China's BT".

"How can this model be so powerful?"

In the provincial capital of Nanjiang Province, still in the Nanjiang Hotel, still in that business suite, Li Huayong has been talking with Lao Lu for more than one hour, and Lao Lu has just asked this question.

"This is because this model is highly compatible with the development of the domestic economy!"

Li Huayong looked at Lao Lu with a smile:

"Uncle Quan, you can think about it, the economic development process of any country, in fact, is a process of urbanization, with the current situation in China, 800 million of the 1 billion people are in the countryside, so for us to do construction, our main source of market, that should be the process of urbanization, right?