Research On Investment Decision-making Of PPP Projects Based On Fuzzy Real Option

There are lots of uncertainties in the development of PPP projects, it is necessary to develop a new thinking to evaluate the investment decision-making of PPP projects effectively. The traditional decision-making evaluating method neglects the value of flexibility which exists in the process of development. The real options come from the basis of financial options; it is an option of selecting different strategy to deal with different factor of uncertainties. Overseas, in the research of real options, scholars have achieved a lot of success, and have constructed some models in the areas of decision-making of PPP projects. In our country, the research of real option and PPP projects is still starting, at present; it is just at the period of theory introduction. In the decision-making of PPP projects, scholars have proposed to use the real options to price the value of PPP projects for the development of these projects, and the input parameters of the model are assumed to be fixed, but the uncertainties and complexities of the realities of PPP projects make these entire hypotheses hard to be right.This thesis analyzed the applicability of real options in the area of decision-making of PPP projects, studied the characters of real option exit in the PPP projects, and elaborated the basic principle of using the fuzzy real option and the hypotheses of constructing fuzzy real options model in the decision-making of PPP projects.Then this paper introduced the theory of triangle fuzzy mathematics after the analysis of the applicability, basic principle and hypotheses of real options, and constructed the fuzzy real option model which fit for PPP projects to evaluate the projects'value with the theory of real option, then elaborated the parameters which may affect the model, and proposed the methods to determine the value of each factor.At last, this paper studied the decision-making of hydropower E project which adopted PPP financing mode in a country of south Asia, and this paper contrasted the result of the traditional net present value to the result of fuzzy real option model of this project, and verified the researches of this thesis, that is the fuzzy real option model had considered the value of opportunity in the process of PPP projects, it can avoid the loss of investment opportunity caused by traditional value evaluating method, it certified the practical value of the fuzzy real option model in this thesis.