The key of these PPP projects was the wrong demand estimation and the governmental subsidy. Intended to lower the toll fare for public interest, the government should use the extra budget to support the project. Is it right to spend more taxes to lower the toll fare, whose utilities are confined only by the users of several specific regions? Another issue is the interest rate of subordinated bond. 32% seems like a devil. What a useless rhetoric? Every interest rate is calculated on compound rate, instead of simple rate. Remind that the term of these projects usually more than 30 years. Moreover, 32% is only a small part of infrastructure fund, whose equity capital is impaired. Understanding the whole picture of the infrastructure simply shows that this article is full of misunderstandings. I have seen this issue for a long time and concluded that some journalists care only about making noise, rather than finding what the truth is. Regardless of the truth, the strange misunderstandings are circulated over and over.
Posted on: Fri, 12 Dec 2014 18:38:06 +0000
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