The Research About Risk Management Of Railway Project

Railway is an important infrastructure in china which plays an important role in the national economy. It can promote the development of iron and steel, cement and other industries. Meanwhile, it also can promote the development of retail, manufacturing and other industries. In2004, the State Council approved the "long-term railway network plan" that in2020, the operating mileage of National railway could reach100,000km. But, the adjustment program in2008adjusted100,000km to120,000km, which accelerated the pace of development of railways in China even further. The sub-prime crisis erupted in America in2008, in response to the economic crisis, the State Council promulgated measures of the4trillions’ bailout, most of which were invested in infrastructure, such as rail which was one of the important areas of investment. Driven by the investments, the railway has made a leapfrog development, of which most major projects had been started. The railway was also accompanied by many problems while it developed rapidly.Firstly, due to excessive reliance on railway construction loans, in the case of bonds issued blocked, the construction funds fell short which resulted in a large number of railway projects suspended or half stoppage;Secondly, due to the existing of some factors such as immature technology, inadequate management and so on, the rapid development of railway was accompanied by safety hazard, and railroad accidents that occurred occasionally, such as the"7·23Yongwen" accidents;Finally, due to the special management system, scheduling rights was highly concentrated, joint-venture railways took the hosting operations, unified liquidation and so on, which hindered the social capital into the railway sector.To improve the situation of railway development, solve the development lag of railway, improve the management efficiency of the railway, mobilize the enthusiasm of social capital entering the railway sector, the State Council made series of reforms in railway industry. In March2013, the Ministry of Railways was relocated, China Railway Corporation was established which implemented the separation of government and enterprise in rail. In August, State Council issued a "On the reform of the railway investment and financing system to accelerate railway construction opinion" to encourage social capital to enter the railway field.In this context, the risk of the railway project will be analyzed in this paper, which the main contents are as follows:(1)Sorting out the relevant literature about risk sharing and risk management. Through sorting out the documents about the risk sharing and risk management in the past, to understand the research frontier of the current projects of the risk sharing and risk management, to grasp the latest research methods, and finally to get that, by using the Multi-objective planning method to analyze the risk sharing of the risk of the railway project, and using AHP and fuzzy comprehensive evaluation to evaluate the risk of the railway project.(2) Analyzing the railway property and its current investment and financing situation. By analyzing the railway property, what can be gotten is, the characteristics of the railway project which is different from other projects’, and which can provide the basis for identifying the risks of the railway project; by analyzing the railway current investment and financing situation, the status of investment in railway projects can be understood, and which can provides a realistic basis for further research.(3) Identifying the Railway project risk. On the basis of analysis of railway property, to make use of reasonable risk identification, to identify the risk of the railway project, and list the risk factors of railway projects. Meanwhile, according to the actual operation of the railway project, to sum up the railway projects participants and to clarify the contractual relationship between them.(4) Establishing risk-sharing models. The core objective of the participating parties involved in railway construction projects, is to maximize the benefits, the private sectors, such as builders, suppliers, reconnaissance units etc., design to maximize the profits; the public sectors, such as the government pursues to maximize the social benefits, multi-objective planning can seek the balance between maximization goals of the parties involved, and achieve the overall maximum benefit, so using the multi-objective planning method to construct the railway project risk-sharing model, in order to seek the optimal risk sharing scheme of the risk.Constructing models of risk assessment. Because of the railway projects’offending bidding, and irregular management etc, the problem that the actual risk-sharing scheme deviated from the optimal risk-sharing scheme, was resulted in actual risk-sharing finance. Based on this, The degree of using the actual risk-sharing scheme which deviated from the optimal risk-sharing scheme was regarded as evaluation.To use the more mature AHP、 Fuzzy Comprehensive Evaluation Methods to evaluate the risk level and understand the level of railway projects risk. Building railway project risk control model guided by Pareto optimality. Pareto optimality Pareto optimal allocation of resources was a state under what the resources were allocated optimally, and the social welfare cannot be improved under the condition that he interests of other people were not harmed. Suitable participants undertake appropriate risk exposures not only can reduce risk costs, but also can reduce the level of risk, which was named as the optimization of resources. So, the optimal risk-sharing financial scheme can be regarded as a Pareto optimal state. Risk controlling is to minimize the risk, make the optimal risk-sharing scheme (Pareto optimal) closer, and finally to achieve the risk minimization.Finally, the packet Western Railway Corridor (Shanxi section) railway project was used to analyze empirically theoretical model on the above, on the one hand to verify the accuracy of the model, and effectiveness, on the other hand to analyze the risk existing in the packet Western Railway Corridor (Shanxi section) project, in order to provide guidance for reducing the risk of the pack West railway corridor (Shanxi section) railway project. It was found through empirical analysis that:First, the risk level calculated by AHP and the one which was calculated by fuzzy comprehensive evaluation method has good uniformity, and the level of risk was acceptable. The risk level of the packet Western Railway Corridor (Shanxi section) railway project calculated by AHP was3.1024, which was tolerable risk, needed to track the changes in risk, and propose measures to control the risk. The risk level of the packet Western Railway Corridor (Shaanxi section) railway project calculated by Fuzzy comprehensive evaluation method was3.1055, which was In seven third-grade evaluation system, and the risk level of the project was low overall.Second, Through the analysis of the risk control model, it was found that, the main reason why the risk existed in the Pack West railway corridor (Shanxi section) railway project was that, the charged price risk, the passenger and cargo risks, maintenance technology risk, operational management risk, financial management risk and human capital risk etc mismatched. To change the current passenger and freight pricing model, and to increase the flexibility of the tariffs, meanwhile,to change the current clearing system, establish a neutral clearing system, the charged price risk should be transferred from the government (Development and Reform Commission) to the investors (the western extension of railway limited liability company); ownership and management rights should be decentralized to encourage the enterprise to undertake the task of railway operations, so as to transfer the passenger and cargo risk> maintenance technology risk operational management risk out of Xi’an Railway, and undertaken by West Extension Railway Co., Ltd or other operating organization; private capital should be encouraged to enter the railway to expand financing channels, and transfer the financial management risk and human capital risk to investors (West Extension Railway Co., Ltd.).In summary, we use multi-objective planning, constructing the railway project risk evaluation index system in the perspective of risk sharing, using AHP, fuzzy comprehensive evaluation method to assess the railway project risk, build a model of railroad project risk control guided by Pareto optimality theory. We found the above model can evaluate the risk level of railway projects well through case analysis, which can provide guidance for the control of the railway project risk.First, proposed a new method for analyzing the railway project risk-sharing. Railway projects need large amount of Investment and Long duration, involved many Participation, who may generate conflicts because of different Pursuit of interests. Such as, Government departments unified pricing to satisfy the public interest, which Cut Railway Bureau (company) market dominant position, but also breed ground for inefficient behavior. Multi-objective planning can seek an effective solution approach to meet the multiple objective optimizations in a certain area. In recent years some scholars use multi-objective planning to research about projects risk management. This article explores the use of multi-objective planning method to build the railway project risk-sharing model.Second, found a new perspective for railway project risk assessment. Construct the railway project risk assessment model from the perspective of risk sharing. Reasonable risk-sharing can minimize the level of projects risk, the larger the deviation between the actual risk-sharing and optimal risk-sharing scheme, the greater the risk of the project. So, we compare actual railway project risk-sharing schemes with optimal’s, use the deviation as the project risk evaluation index, meanwhile use AHP, fuzzy comprehensive evaluation method to build the railway project risk evaluation model.Finally, improved the theoretical foundation about the railway project risk control. Pareto is a state of optimal resources allocation, under which unable to improve their welfare states in the case of without prejudice the welfare of others. Optimal risk sharing status is this state, which cannot be without prejudice to the other participants’interest to increase the interest of one or some of the participants. Pareto improvement condition exists when the actual railway project risk-sharing program did not reach optimal risk-sharing scheme, that one or some participants can increase interest in case of without prejudice to other participants’. Through this process the actual railway project risk-sharing program infinitely close to optimal risk-sharing scheme, thereby reducing the level of risk, minimize risk. Therefore, based on Pareto optimality theory, risk control model was constructed to provide guidance for the railway project risk control.