Yanqing Zone of 2022 Winter Olympics begins raising private capital

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The Public-Private Partnership (PPP) project in the Yanqing Zone of the 2022 Winter Olympic and Paralympic Games has officially launched.

China.org.cnUpdated: April 10, 2018

The Public-Private Partnership (PPP) project in the Yanqing Zone of the 2022 Winter Olympic and Paralympic Games has officially launched, according to the Beijing Municipal Urban Planning, Land, and Resources Committee. This PPP project is the first in Beijing to combine public biddings for investors, contractors, and the leasehold of state-owned land. The application will close at 5:00 p.m. on April 26.

The term of the partnership is 30 years, according to the announcement. The construction will complete by June 1, 2020, and the project will continue to run for 25 years following either three months after the closing of the 2022 Winter Olympic and Paralympic Games, or an alternate date designated by the Organizing Committee for the Winter Olympics.

The construction of the Yanqing Zone are divided into two parts. Part A is solely sponsored by the Beijing Municipal Government and consists of the National Alpine Skiing Center, the National Bobsleigh and Tobogganing Center, and supporting infrastructure. Part B consists of the Yanqing Olympic Village, the Highland Media Center, and supporting infrastructure. The PPP project in the Yanqing Zone includes the investment, construction, and operation of projects in Part B, as well as the post-Olympic Games transformation and operation of projects in Part A.

The enforcement body of the PPP project is the Yanqing Regional Government, the licensor of the state-owned land is the Beijing Municipal Urban Planning, Land, and Resources Committee, and the representative governmental funder is the Beijing Enterprises Group Company Limited.

The construction site covers the area between the Songshan Nature Reserve, West Dazhuangke Village, and the County Highway No. 012. The total construction area is around 101,000 square meters, and the construction period is 702 days. The static investments (excluding land costs) add up to 2.8 billion yuan (US$444 million). The project is noteworthy as it marks the first time that Beijing calls for bids that combine private capital and state-owned land use.

The project will evaluate various factors about bidding entities such as credit ratings, construction capacities, financing capabilities, operational capabilities, commercial offers, and experiences in the winter sports industry, in order to choose the most competent investor and contractor.

It is estimated that to be able to bid for the project, the private capital holder should have either previously landed a construction contract worth at least 500 million yuan, constructed a real estate project covering at least 150,000 square meters, or landed a municipal public project worth at least 100 million yuan. The capital holder also needs to have operated ski resorts that contain snow packs or trails larger than 100,000 square meters. In addition, the bidder needs to have demonstrated fundraising capabilities of no less than 3.5 billion yuan, as well as other relevant qualifications as a contractor.

The successful bidder will be invited to found a project company with the Beijing Enterprises Group Real-estate Co., Ltd. The registered capital of the company accounts for 30 percent of the total investment of the project, of which the equity of the Beijing Enterprises Group Real-estate Co., Ltd. is 40 percent, and the equity of the private capital holder is 60 percent. The company will take full responsibility for the planning, financing, constructing, operating, debt repaying, and managing of the project. After the term of partnership ends, the company will hand the promissory assets and documents over to the municipal government.

“The PPP mode is conducive to the idea of green, sharing, open, and transparent Olympics. We will be able to introduce advanced technologies and management practices, and nurture our winter sports industry,” officials from the Beijing Municipal Urban Planning, Land, and Resources Committee said. They added that introducing private capital will encourage innovative financing practices and drive the economy, and sharing the Olympic Games with the whole society is good for the government, the public, and the private capital.