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Appendix

Operational Structure and Basisc Scheme for Soft-landed Water City

Generally, for public works such as road constructions, local bodies or the national government posit such works as crucial operations, taking many years to acquire the land from residents thereon in order to commence construction. Other schemes that can be considered are such as those of having the landowners become shareholders in the corporation by conveyance of their land and gaining dividends therefrom (so-called "asset finance") . Under our proposal we can consider a plan to set up a SPV (special financial vehicle) for investing in the real estate, in the form of a Private Finance Initiative(PFI)scheme (See Flowchart).

First, when the PFI scheme is authorized and established, the PFI body proceeds to purchase or securitize the land. Then upon obtaining the real estate, large general constructors would be contracted to commence construction work; upon completion, the PFI body will carry out the managerial operations in the waterfront site. Simultaneously with construction at waterfront site, the PFI body would contract shipbuilders to construct the floating units -- to become the floating infrastructure for the urban residences that will upon completion -- at designated locations. Upon delivery of the floating units, the general constructors would commence work on the buildings atop floating units or inside the floating units. The costs would be covered by an investment fund created by the PFI scheme or a non-recourse loan provided by financial institutions such as banks. Thereafter, the income, etc. from the rent and the cash flow produced by the actual real estate will be used to repay the financial institutions for interest or to pay out the dividends to inhabitants holding the securities by the PFI side.

Blessed with a comfortable setting on the waterfront and value addition, investors are bound to be drawn towards such an environment. In purview of this, that the residents would want to throw in their lot with the PFI scheme can be promising prospect, while leading to a further rise in the profit margin.

Private Finance Initiative(PFI)flowchart for the [Soft-Landed Water City]

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