Countermeasures On Implementation And Financing Of Metro Project In Tianjin

As urban population grows and urban economy develops, urban traffic has attracted increasing concerns from governments and general public. Metro, advantageous in fast speed, efficiency, comfortable and environment-friendly in nature, has become a necessary facility as a solution to urban traffic domestically and internationally. Metro program is characteristic of large scale of investment, long construction period, limited short-term return, while outstanding scaled return, stable cash flow in future and rapid increase rate.The most immediate bottleneck of metro development in Tianjin lies in its relatively insufficient investment, to wit, shortage of construction fund. To ensure realization of development planning of urban rail traffic in Tianjin and successful implementation of metro construction projects, establish a public communications network backboned by rail traffic, provide citizens with convenient, fast, cost-effective and secure communications service, it is necessary and urgent to study countermeasures for metro financing in Tianjin for the time being.By analyzing problems with prevailing investment and financing mechanism for urban infrastructure in China, borrowing experiences of reform on mode of investment and financing in utilities from inside China and abroad, the author herein conducted analysis, comparison and option on the traditional mode of investment and financing, the newly emerged mode of securities financing, multiple modes of project financing useable and available to Tianjin metro construction. The author, by taking the example of Tianjin No. 2 metro to be constructed, employing cash flow statement, dynamic risk analysis, and CAPM model, determined risk rectification discount rate, discounted cash flow model, and obtained NPV after risk is so rectified. Meanwhile, the author went through risk evaluation for the entire course of the project by introducing such indices as DCR and CR, and proposed ways of preventing and sharing financing risks under the metro project. Lastly, the author developed a train of thought for an innovative investment and financing mechanism for Tianjin metro project and put forward detailed financing countermeasures and suggestions.