Research On Optimal Problems Of Financing Structure Of Municipal Infrastructure Project

The construction of the municipal infrastructure is the basis of the existing and development of the city. It is the foundation of realizing the function positioning and improving general competing power. With the speedy development of national economy and gradual acceleration of urbanization process, increasing investment of municipal infrastructure, creating out-standing investment and financial environment and improving life quality and environment have become more and more important. The municipal infrastructure projects are characteristics of public interest, sociality, up-front, large investment scale, long construction period and hard recycle of construction capital in short run, which decide the source of its construction capital are mainly the input of government budget. The government budget fund originates from land premium, the payment of superior department and the charge which the government provides articles and services(such as tax revenue and stipulated fees). However, the poor efficiency which is derived from complicated government investment organization and more technological process is always the obstacle of the financing of municipal infrastructure projects. At the same time, the government investment is insufficient compared with of the funds demand of municipal infrastructure projects. Inadequate investment becomes the"bottleneck"of the development of municipal infrastructure. Although a few explorations of theory and practice of financial mode of municipal infrastructure projects has been started, the financing of municipal infrastructure projects show lots of problems, such as the narrow financing mode, short finance supply, limited bank credit financing, low stock right financing proportion and short effective financing mode and so on. In order to solve the above problems, the paper choose the optimizing question of financing structure of municipal infrastructure projects as the topic, systematically study the formation mechanism and optimizing model of financing structure of municipal infrastructure projects and carry on optimizing evaluation for financing structure, which solves the capital bottleneck of municipal infrastructure projects and improves the value of municipal infrastructure projects.The financing structure of municipal infrastructure projects is refereed to the capital source, combination and their relationships during the raise money of projects. It focuses on the proportion relationships of stock right financing and creditor's right financing. The characteristics of municipal infrastructure projects are public articles, externality, natural monopoly and property rights, which results in the differences of financing between municipal infrastructure projects and general firms. It should adopt different financing pattern as to different projects because of the double traits of public and private articles. The preference of municipal infrastructure projects is creditor's rights financing and the stock rights financing will be improved. Furthermore, the marketization of financing pattern is the financing trend of municipal infrastructure projects. Because the investment scale of municipal infrastructure projects is numerous, it must adopt diverse financing channel to solve the problems.The financing behavior of municipal infrastructure projects is the set of process of the generation of financing requirement derived from the drive of value maximization objectives, the financing motivation which financing requirement drives and further the financing behavior is formed. The financing behavior involved effective selection of financing participants and financing mode, mastery of financing preference, financing cost and risk and the formation of optimal financing structure. The result of financing behavior is reflected by financing structure, and the mode of financing behavior also decides the financing performance, which solves the capital bottleneck of municipal infrastructure projects and realizes the objectives of maximization of social profits.The financing problem of municipal infrastructure project is complicated system engineering and it relates to lots of influencing factors. Exploring the influencing factors and their interactions of financing structure of municipal infrastructure project is all-important for solving financing problem of municipal infrastructure project. the paper systematically summaries the influencing factors on financing structure of municipal infrastructure project from internal and external factors and divides into 4 major kinds and 15 small kinds. The paper systematically analyzes the influencing factors of municipal infrastructure project based on the method of DEMATEL. According to the analysis of the parameters of reason factors, result factors and center degree, it identifies characteristic of public goods of the project, project governance structure, control policies of admittance and price, productive technology level of product, the investment and financing level in the financial market and social trust system as the key factors of influencing financing structure of municipal infrastructure project.The issues about the financing of municipal infrastructure project are different from the financing of general firms, its natures of public goods determine their special characteristics of the transaction and the types of governance structure. In accordance with item discrimination theory, municipal infrastructure project can be divided into public projects, quasi-public projects and business projects, according to the different characteristics of transaction, we should use an integrated governance structure, co-management structure by stakeholders and marketing governance structure. The governance structure of municipal infrastructure project affects the production of financing structure, manifested as the core of governance structure—the affection of the project ownership on financing structure. For the quasi-public municipal infrastructure project, due to non-corresponding between residual claims and the residual rights of control, we need to adopt the co-governance model by the government and private stakeholders, allow the private sector to share part of the residual claim, allow private capital into the areas of municipal infrastructure which can form private shareholders, this requires the government to formulate appropriate monitoring mechanisms and price incentives, for debt financing, the government should provide security devices. The financing structure of municipal infrastructure project has established within the framework of the governance structure, and they mutually influence and constraint, both based on the maximized value of the project as the common goal are coordinating developing.The public projects adopt the government financing funds including the government budgets, policy fees and operational resource income. Aside from the financing input, government can adopt the innovational financing pattern of distributing municipal bonds and government purchase, which make up for the disadvantages of the markets and maintain the normal operation of municipal infrastructure. These patterns input the role of government into the investment and financing system which is market-oriented.Quasi-public municipal infrastructure project is something in between of public and profitable project. It has charging mechanism and capital flow in with potential profit capability. However, the cost can not be well drawn back because of state policies and imperfect charging price system. Therefore, quasi-public municipal infrastructure project requires government subsidy and favorable policies aiming at attracting private investor's capital participation into its market operation. Multi-objection financing optimized model among government, investor and bank has been built up in this paper. In the mean time, regulates the normal profit upper limit of investor for government which not only guarantees private investors gaining investment return, but also restricts their super profit. Via practical example analysis, the investment ratio under the most maximized profit condition among government, private investors and bank has been given. Form big to small order, the private investor's ratio is the most, the second is bank and government becomes the lowest.Operating municipal infrastructure projects are that government and the investors sign the concession contract, through government regulates incentive factors, such as concession period and price, and then attract private investors invest municipal infrastructure projects and make a profit. From their point of profit maximization, according to the government's concession period's length, the investors invest municipal infrastructure projects and negotiate with financial institutions about a loan, form cooperative game theory of private investors and banks. The paper designs financing structure optimization model of operating municipal infrastructure project with Nash negotiation model, which under the condition of sincere negotiation between private investors and banks optimizes financing structure and increase both sides of profit. Combining with the actual example, the text also analyze the impact of their parameters on respective financing proportion. The result is that there is positive correlation between the parameters and investors'financial proportion and there is negative correlation between return on banks'investment parameter and their financial proportion, then provide reference for decision of operating municipal infrastructure project.According to the three optimal objectives of maximization of project value, minimum of financing cost and risk, the paper establishes the financing structure optimal evaluation index system of municipal infrastructure project from the 5 aspects of governing structure, financing cost, financing risk, debt ability and profit ability. The multi-objectives model is built based on the method of entropy to carry on the optimal evaluation for financing structure of municipal infrastructure project and prove the practical value of the evaluation model using the case, at the same time it also prove the validity of the optimal model introduced in the paper. The conclusion is that the optimal scheme is the proportion of stock rights is relative high and the proportion of creditor's rights is relative low during the many financing scheme. Finally, it uses the projects of light railway and sewage processing to carry on the case analysis and provides the optimal strategies of financing structure of municipal infrastructure project.