Royal Hill, Ma On Shan City Sewage Treatment Bot Project Risk Analysis

As the development of economy and the growth of population in Maanshan city, the situation of it's urban sewage treatment is getting worse. In order to make sure the sewage treatment program can work successfully, the government of the city decided to adopt the BOT model to build the Maanshan Wangjiashan Sewage works after a wide range of analysis and demonstrations. Since the BOT model is complex and it's the first project which uses of BOT model, also, the corresponding laws and regulations are not satisfactory in China, it takes risk for both the government and the project investors. How to identify and control these risks to ensure the normal operation of the project become very important to both sides of the BOT project. In this paper, the Maanshan Wangjiashan sewage works are used as an example for the analysis of risks which may exist in the BOT project, including the internal and external risks in the project itself, the risks which will take by the participants, and the risks exist in every stage of the implementation. After the profitability analysis, sensitivity analysis, and breakeven analysis from a financial point of view, we found the project is feasible. In the end, we conducted a comprehensive assessment of risk of the project by using the analytic hierarchy process (AHP) and found that in the various types of risks exist in BOT sewage project, the greatest risk is operational risk, followed by is market risk, then the project completion risk, political risk and financial risks. The risks of water volume and water price are particularly important in the operational risks.