Study On Risk Management Of PPP Financing For Urban Railway Projects In China

With the rapid development of economy and the enhancement of urbanization level in China, a lot of social problems have been brought about such as population concentration and environmental pollution, the transportation problem is also serious day by day. With the virtue of high capacity, fast speed and environmental friendly, urban rail transit is an important solution to reducing the density of road vehicles. However, the construction of urban rail transit needs a lot of money, which is the main difficulty that many cities in China face. At present, China has been trying to change the urban rail transit financing system, and PPP (Public Private Partnership) is one of the most important development directions.It is noteworthy that large amount of uncertainties exist in the process of PPP financing, and there's few research on risk management in this field. Because of lack of theoretical basis and evaluation system, some consequences are often caused, for example, the cost exceeds budget, the construction period extends, and even the project quality and people's safety could be affected. Consequently, a comprehensive dynamic risk management model for PPP financing is necessary and significant.Firstly, the thesis will study the history and current situation of infrastructure financing at home and abroad. On this basis, a basic framework of dynamic risk management model for PPP financing process was established according to the modern risk management theory. Through historical data, practical experience and statistical analysis of expert opinions on rail transport, risks in the process of PPP financing were identified, evaluated and analyzed. Recommendations for dealing with and sharing the risks were put forward and the dynamic model of risk management was established and improved. Finally, the method of Monte Carlo simulation was used to modify the model in order to facilitate quantitative analysis of multi-factor risks. Real world case studies are also used to verify the model.The thesis has simulative effect on the theoretical innovation in the field of infrastructure financing. It also has practical significance to reduce the unnecessary cost of rail transit project construction and increase efficiency of PPP financing in China.