Risk-based Financial Evaluation For Domestic Wastewater BOT Projects

With the improvement of market oriented reform for the municipal utility and establishment of the municipal utility industry concession system, a large number of infrastructure were invested, constructed and operated in the way of BOT mode by enterprises in China. Project financial evaluation method plays an irreplaceable function for investment decision and market competition of a enterprise, but it has not been formed unified method of BOT project financial evaluation at present. There is less study of the risk factors of BOT project that influence on the financial evaluation. Therefore, in order to provide support for enterprise investment decision. It is necessary to study the means of BOT project financial evaluation which influences by risk factors.This paper Identified and summarized the main risk factors of the BOT project of sewage treatment project by reading the literature and project case study. from the perspective of financial evaluation, obtained 10 of the quantifiable financial evaluation of risk factors. Ultimately the paper determined the three risk factors as the project financial evaluation risk factors that evaluated in the mode. This paper analyzed the wastewater treatment BOT projects characteristics of financial evaluation. By analyzing the construction investment of sewage treatment, water quantity, water quality, he major repair cost, Planned use of funds and other factors of sewage treatment project, the paper provided the treatment of these factors in project financial evaluation and established the financial evaluation model of sewage treatment BOT project based on risk factors and applied project case validating the model.The study found that the construction investment, water inflow, water quality of the sewage treatment BOT project were the most important risks. In the financial evaluation process, the planned use of funds, construction period interest, depreciable lives, residual value of fixed assets, large repairs and fiscal policies are required specific analysis and processing. The paper proposed project construction investment forecasting methods, the forecasting methods of water inflow and water quality of the sewage treatment project and applied to the project financial evaluation. The sewage treatment BOT project financial evaluation methods based on the risk factors proposed by the thesis can improve the accuracy of the sewage treatment BOT project financial evaluation, reduce the risk of sewage treatment BOT project investment and enhance the competitiveness of investors.This paper studied the BOT project financial evaluation of wastewater treatment financial risk factors systematically from the point of the project financial evaluation and proposed financial evaluation improved method of sewage treatment BOT projects. This method has direct use value for the BOT project of sewage treatment and has a good reference and guide for other BOT projects.