Research On PPP Modefinancial Analysis Of County Township Sewage Treatment Facilities

For decades,with the fast development of the county economics,the business of the area has developed quite a lot.On the other hand,the relationship between human beings and environment has become severe.Particularly,the water environment has reached the limits of sustainability.As a result,the solving of the county area water environmental issue has been very critical.From recent years,the government has enlarged the investment on the country township sewage treatment,but this has not fully satisfied the demand for the township sewage treatment.In parallel,with the further development of social capital financing and reform of our country,the government has been transforming to adopt the PPP model gradually in a wide range of projects.The PPP is based on the collaboration between government and private sectors,which has changes the single government budget approaches conducted before.The PPP encourages private companies to cooperate with government to participate into the public infrastructure construction in portions of investments for both parties,or the government just directly asks for a full ownership of the project,and buy-back,or rebate at a periodical terms basis to the social investors,such as the SG township sewage treatment project studied on this paper.Hence,this paper starts the discussion of investment analysis based on the SG township sewage treatment data from to perform accurate estimation on fundamentals data for financial results.Upon which,the research then concludes the project under estimated is valuable to be invested or not.The major research content of the paper is: Based on the investigation on the management ofSG country township sewage treatment project,the paper makes a comprehensive analysis on the characteristics and hardness at running the township sewage treatment company.On the current situations with problems,the county government's budget with demand for development,the paper proposes the feasible solutions for the county infrastructure building.After comparing with different methods,the PPP model is suggested.It is guided by the government with minimum investment.The government raises money from the private sector to participate into the county infrastructure building and running business.This has become valuable decision making arguments for government on choosing such PPP model.Firstly,the paper describes the background of this SG country township sewage treatment project on the contents of constructions and scale,then assemble to the construction full investment,estimation of the cost of investment and the revenues.Secondly,at the PPP model's running mode,the loan table for the payment of original capital and interests at each case of loan at 70%,60% and 50% of the original investment is calculated.Based on the overall financing loan's percentage above from banks,plus the compensation from the government which contributes to the currency flow,the feasibility of the country township sewage project is analyzed.Lastly,some of the issues of PPP model have been fully investigated and some of the solutions and advices are provided accordingly.According to the full investment capital currency table on the paper,the conclusion of theSG country township sewage project's investment study is:(1)It is expected that the full investment of SG country township sewage project is about 356.998 million RMBs(yuan),within which,the project original investment is 415.21 million RMBs.(2)From the 11 th year,currency income will be larger than the currency outcome,with a positive income 370.3 thousand RMBs.Along with the increase of the volume of the township sewage year by year,net income is increasing as well,till 1.50145 million RMBs in the 30 th year.(3)According to the project budget plan,the currency flow is assembled.The load amounts versa full investment capital to 70%,60% and 50% are considered and estimated in a comparison.The net income values(NIVs)are-30.12594 million,-30.55864 million and-30.81487 million RMBs respectively.All of them are smaller than 0 and negative.Considering the compensation from government based on the formula of government compensation = government compensation current values(F/P,8%,2)(A/P,8%,28),so the results of 70% load scale is calculated as government compensation to 208.7 thousand RMBs per year.(4)Through the linear analysis,it concludes that the changes of load scales has very limited influence to the government compensation values.So,the government can enlarge the acceptable project original investment fund requirements in order to lower the private sector self-owned fund requirement.(5)When load is not considered,the trend curve y =-3508 x + 3386 is fitted by the discrete pointed.At the load scale of 70%,the trend curve fitted is y =-3509 x + 3179.As a results,the township sewage treatment fee increasing range is about 90%-96% for non-government compensation case at different load scale.So,this increasing range is big and not feasible in reality,then the project is with much attractive to the private companies for investment return rather than pure government owning.In summary,based on the SG county township sewage project's investment study,the paper provides reliable references for both the government and private companies on conducting and managing the business of the township sewage treatment project,and valuable strategies and detailed guidelines for on running the township sewage treatment project.