1988: Back to the human world for a few years

Chapter 135 One-Way Firebreak

To talk about the two-tier PPP model, you must first know the PPP model.

PPP model is the abbreviation of Public-Private-Partnership, which is usually translated as "public-private partnership model";
As the name suggests, this is a cooperative model that establishes a community relationship of "sharing benefits, sharing risks, and full-process cooperation" between the competent authority and the enterprise. The purpose is to significantly reduce the financial burden and risks of the competent authority while leveraging huge investments in major projects by attracting social capital.

In fact, this is a model that has been widely used in later generations. Not to mention people working in consulting, finance, and engineering, even if you have moved bricks on a construction site for a few days during the summer vacation, or if you like to travel around by car, you should be familiar with it... In addition to the most well-known Imperial Capital Metro Line 4 and the Bird's Nest, many highways, tourist attractions, power stations, and bridge construction projects across the country also use this model.

Of course, since domestic PPP projects have been using the BOT model (Build-Operate-Transfer) for a long time, it is very easy for projects to be abandoned halfway through… Even if they are successfully delivered, they are criticized for being too eager for quick success and quick profit because private capital wants to quickly recover costs during the operation period (such as excessively high highway tolls, segmented charges for scenic spots, etc.)
But in fact, the PPP model is essentially a general term for "a model in which the public sector cooperates with the private sector". There is no fixed model, and its application is not limited to large-scale infrastructure projects... As long as it can effectively leverage social capital and invest it in projects that are helpful to the economic development of the country or region within a controllable range, it can be called a PPP model.

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However, even though the PPP model in China has gradually moved away from the scope of large-scale infrastructure and has begun to be applied to rural development, the main parties are generally still "competent department-village collective-enterprise" or "village collective-enterprise", and the BOT model is adopted...

For some well-known reasons, during the operation period of most projects, villagers, as members of the village collective, may not be able to get the full share of benefits that belong to them.

Thus, the "two-tier PPP model" emerged... This is a slightly innovative cooperation model developed by Professor Wen based on the PPP scope framework and the actual situation of domestic rural areas.

Simply put, under the two-tier PPP framework, the cooperative entity is still the village collective-enterprise, but in this process, the village committee needs to convert the villagers involved in the project into asset packages based on human resources and resources after evaluation by the relevant platforms of the administrative department, and establish a new village collective enterprise. This new village collective enterprise and external enterprises will jointly form a new project management company.

The biggest difference here is not the cancellation of the SPV link (a project company that specializes in equity structure design and has extremely small bankruptcy losses), or the weakening of the risk isolation mechanism under the traditional BOT model... After all, the system is dead, but people are alive. With the intelligence of Chinese people, as long as they are willing, there are plenty of ways to withdraw through various operations when the situation is not right, thus avoiding their own losses.

The biggest highlight of the two-tier PPP model is that it can maximize the benefits of both parties, especially the villagers, at the design level, and stimulate their enthusiasm... Although the premise of all this is that the project can be profitable, as long as everyone is united, it will always be easier to succeed, right?

(In order to avoid being criticized by readers for being too wordy, I will only touch upon the two-tier PPP and SPV content briefly. If you are interested, you can check it out yourself, or read my previous book "1998";)

In addition, I know that there is a heated debate about Teacher Wen on the Internet, and some people are even talking about the issue of capital going to the countryside. But I want to say that the right and wrong of this kind of thing can only be left to history books to judge... A kitchen knife can also kill people, but can you define it as a murder weapon?
Referring to the difference between the all-employee stock ownership model of Pangdonglai and ordinary supermarkets, I have always been optimistic about the potential of this "retro design model"... Of course, if the two-tier PPP model is only applied to the tourism industry, I think it is a huge waste and deviation.)
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However, the two-tier PPP model envisioned by Yang Mo is slightly different, and even the primary and secondary positions of the entities are reversed.

Although he also required the production teams of these villages to jointly form a new mixed-ownership enterprise with Momobaitou;

Although he also asked several village elders to go back and persuade the village collective to combine the vacant land and suitable manpower that can be used to build chicken coops into an asset package;

Although he also required that these asset packages be evaluated by Momo Baitou before being converted into shares, and promised that while Momo Baitou would have the right to make operational decisions, its share of the new company would not exceed 20%;

but……

The production brigades of these villages were not directly incorporated into the new enterprises.

They will first establish a company A in a joint venture.

Then, through equity design, an SPV company that seems to be responsible for raising chickens was established on the basis of Company A.

Then, in the name of this SPV company, it will form a final new company with Momobaitou, and then participate in the operation and management of the new company... In other words, this is a company with a double-layer SPV nature.

The most crucial thing is... in the equity structure of this SPV company, the major shareholder holding 60% of the shares is a "partnership", and the individual shareholders of this partnership are Yang Mo's mother and Lu Yingying's mother.

It was obvious that Yang Mo was building a firebreak, and it was a one-way firebreak.

If one day, Momo Baitou falls into the hands of others and they want to suppress the villagers' chicken farm, Yang Mo can decide whether to make the SPV company bankrupt and run away based on the actual situation;

Anyway, the registered capital of this SPV may be only 10,000. If it goes bankrupt and liquidates, the mothers of Yang and Lu can only pay out this 10,000 at best. Several villages can afford such a small amount of money... But Mo Mo Bai Tou may lose millions or even tens of millions of dollars.

Moreover, this is a game of numbers on paper. The millions of funds invested by Mo Mo Baitou are not really physically lost, but are transferred to Company A, which is jointly established by several village collectives through this means... This is a joint village collective enterprise. With just a little trick, the most valuable repayment assets on the books will be the land and the chicken coop on it. Even if the drilling company is angry, even if they want to ignore business rules and play the game of collective responsibility, they can only accept it when faced with a sensitive collective asset like land.

By then, with the initial investment of millions of funds from Momobaitou, Company A’s chicken farm can be “revive on the spot” and then become a medium-sized broiler farm with some influence in the vicinity… With this capital, what can’t be done?
Of course, this is a risk plan. As long as the leader who takes over Mo Mo's investment does not make things too difficult for Yang Mo, he is unwilling to use this "risk isolation" method. After all, this method has a bad reputation.

In fact, if employees of state-owned enterprises were not prohibited from engaging in business, the names of Yang Mo and Lu Yingying would have been filled in the individual shareholder column of the partnership.

Maybe someone would say: Yang Mo, are you stupid? You buried yourself in a cesspool for the benefit of a few villages... Do you really think you are a saint?

Ha ha……

Things are never that simple.

You just need to know that, as a prerequisite, in Company A jointly established by the four villages, the four production brigades each hold 21% of the shares, and in the remaining 16% equity pool, 9% of the shares will be allocated to the fathers of two people in the name of "outstanding contribution reward"... Even the general manager column of Company A is written with the name of Yang Mo's father.

From an objective standpoint, this is a bit excessive, which also means that as long as they don't do anything outrageous, this company A with unlimited potential will always be in the hands of Yang Mo and his son.

But faced with the annual breeding target of at least 15 chickens, the investment of millions of dollars, and the bright future that is visible to the naked eye, let alone a mere 9% of the shares and the dominant position, even if you let these local celebrities and people from the four production brigades serve you by massaging your back and washing your feet every day, they will not hesitate at all.

Being poor... is never glorious!
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It took Yang Mo more than an hour to explain to the villagers what his idea of ​​a two-tier PPP was all about. Then he looked at everyone with a serious face: "My uncle, uncles and aunts, everything we are doing now is a race against time."

“No one knows when the new manager of Momo Baitou will be decided; no one knows how many days I, the head of the management guidance team, can issue orders;”

"So... for this new unit established by each village, please go back and do your best to do ideological work for the production team. It's best to complete the establishment within five days... Similarly, the SPV company must complete all procedures within a week;" "It's not easy to set up a limited liability partnership in an individual's name now, so... I have to trouble you, Third Uncle... Don't worry, I will let my friend give a heads up in the county in advance, but you still have to show up and take me and Yingying's mother on this trip... The two elders are not familiar with this area, and my friend is not in the industrial and commercial system. It's not good if something unexpected happens."

Third Uncle thought about it and nodded without hesitation.

Of course he knew that Yang Mo asked him to do this not because he was really afraid of any small accidents, but to let him stand up and express his position to the people in the villages... As the saying goes, actions speak louder than words. He has the highest seniority in these villages, and some things will be more effective if he comes forward.

Seeing this, Yang Mo smiled and said, "Although the new unit will not be officially established until five days later, we can't just sit there and wait. After you go back and do ideological work for the production teams in each village, I will ask you to quickly start the preliminary work... Integrate the land that needs to be integrated, level the land that needs to be leveled, and select the people who need to be selected;"

"After these tasks are completed, I will ask experts in this field to come over and tailor a chicken house construction plan for us... At the same time, technical training will also be carried out in advance."

At this point, Yang Mo concluded: "As I said before, we are now racing against time. We must finalize the cooperation framework and get the project off the ground in the shortest possible time... By then, even if a new manager of Mo Mo Bai Tou takes office, facing the black and white documents and the money that has already been invested, he will not be willing to take the risk of breaking the contract, right?"

Everyone laughed when they heard the words "risking breaking the contract".

Both parties have been enemies for more than ten years, and they certainly know what the drilling company fears most.

After laughing for a while, a man in his forties suddenly hesitated: "Yang Mo, to be honest, there is such a big money-making project. It won't be difficult to convince the production team after returning. Anyway, we are all poor. If we can make money, it's like pie in the sky. No one is so hypocritical;"

"But the problem is... the other villages are easy to deal with. They are not too big or too small in size and population, and they only have one production team.

"But although our Baiyang Village has a lot of land, it also has a large population... There are two production teams in the village. Even if the broiler chickens you mentioned grow very fast, I'm afraid it won't take that many people to raise a few thousand chickens, right?"

At this point, the man was a little embarrassed: "How about... Yang Mo, can you think of a way to get more chicken-raising quotas for our village?"

Although most villages in the 1970s and 1980s had only one production brigade, some large villages with large populations often had two or even three production brigades. Therefore, if large-scale farming was adopted, it would be impossible to keep everyone employed if only 6,000 chickens were raised in a batch.

If you are not needed, you cannot get into the new company and you cannot make money. Once the project is on track, it is easy to cause conflicts due to jealousy, and there will be more uncontrollable risks.

Yang Mo naturally understood the key point. After thinking about it, he shook his head and said, "No, the breeding quota of 15 chickens is taken from three farms... Now the chicken coop over there is half built, and those farms are also very useful. Not only is it troublesome to change the drawings temporarily, but reducing their breeding scale will also bring a series of negative effects."

Upon hearing this, the man let out a sigh of disappointment.

However, this chicken farming project was a piece of cake, and he had no right to be dissatisfied... Even if conflicts arose because one production team lost the election, that was a problem he needed to solve as the leader of the village. He could not pin all his hopes on a junior like Yang Mo for everything.

Yang Mo saw that he was a little disappointed, but he smiled: "Uncle, although it is unlikely to increase the breeding quota of broiler chickens in your village, there is a way."

The man was overjoyed when he heard this: "Xiao Mo, do you have any good ideas?"

Yang Mo looked at him with a smile, and then glanced at the crowd: "In fact, just like farming, there are many links involved in raising chickens, not just the broiler chickens that everyone sees... Breeder hatching and screening, vaccine production, feed production, production of various epidemic prevention drugs, harmless treatment of feces, slaughtering and cutting, recycling and reuse of chicken feathers, and finally food processing and transportation. There are 20 to 30 links in total."

As he spoke, Yang Mo took out a cigarette and smoked a few more. He then said calmly, "Although we cannot touch the breeding and epidemic prevention links due to their high technical content, most of the other links have also been allocated out due to overall considerations... However, a portion of the production capacity has been allocated for the slaughtering and cutting links and the production of special feeds."

At this point, Yang Mo glanced at the man and said, "Uncle, there aren't many wastelands in your Baiyang Village that can be converted into industrial land, so forget about the slaughterhouse. It may not sound impressive, but in terms of the number of employees and the area occupied, it is definitely a large one... But it's no problem to take on the task of planting and producing some of the raw materials for special feed."

Special feed?

Everyone looked at Yang Mo with some confusion. Yang Mo had said this word once before, but they still didn't know what this thing was.

Seeing this, Yang Mo smiled and explained: "The so-called special feed sounds very high-end, but in fact it is just corn feed mixed with different Chinese medicinal ingredients according to the different needs of the broiler growth cycle;"

"If the ingredients are properly proportioned, this stuff can not only reduce the use of antibiotics and effectively reduce the incidence of broiler chickens, but also has a certain fattening effect, which has a very obvious effect on improving the quality of chicken... It can even increase the special flavor of chicken. Chickens raised with special feed can not only be sold at a high price, but are also very popular in some foreign regions!"

"In fact, the special broiler farm in our village raises this kind of stuff... The other four farms also have a breeding quota of 2 special broiler chickens at this stage. This means that the demand for special feed is not a small number."

As he spoke, Yang Mo touched his chin and said, "Uncle, if I remember correctly, Baiyang Village is relatively close to Tai'an, and in previous years, we have planted Chinese medicinal herbs such as Polygonatum sibiricum, Salvia miltiorrhiza, Trichosanthes kirilowii, and Scutellaria baicalensis on a small scale;"

"Although I haven't heard much about the effects of Polygonatum sibiricum, Salvia miltiorrhiza, and Trichosanthes kirilowii on poultry farming, Scutellaria baicalensis is an indispensable ingredient in special feeds because it can significantly improve the immunity of animals...How about I give you some of the orders for planting corn and Scutellaria baicalensis, and build a Chinese herbal medicine primary processing factory in your village that mainly produces Scutellaria baicalensis?"

"You know, Chinese herbal medicine is very strange. If you use Western technology to extract the substances in it, the process is quite complicated and expensive, and the effect is not very good. It also requires people to prepare it according to the method of traditional Chinese medicine, and then grind it into powder and add it to the feed to be effective... This is a labor-intensive job, and it cannot be done without enough people."

The man was overjoyed when he heard this: "Great! In addition to the land for staple food and cotton, our village can also have more than 300 acres of economic land... I will plant all these things for you when the time comes!"

"Besides that, there are more than ten mu of saline-alkali land next to the village entrance where nothing can be grown. We will build a processing plant there when the time comes!"

Hearing this, Yang Mo laughed, looked at the time, and stood up: "Okay, Third Uncle, uncles and aunts, since the instructions have been almost completed, let's get started... It's getting late, Yingying and I have to go back to the company."

Seeing this, everyone nodded. As Yang Mo said, everything was now a race against time and there was really no time to waste. So they said goodbye quickly and waited to send Yang Mo out before returning to the village immediately.

Just as Yang Mo greeted everyone and was about to wake up the driver of the small car team, Yang Ma suddenly called him.

"Xiao Mo, wait a minute, come inside first... Mom has something to tell you."

Seeing his mother, who was always reserved and introverted in front of outsiders, calling him under everyone's curious eyes, Yang Mo scratched his head in confusion, then followed her into the house obediently...

(End of this chapter)