Research On Investment Structure Of MSW Treatment PPP Project

As the quick development of the MSW (Municipal Solid Waste) treatment inChina’s environment protecting market, PPP (Public-Private Partnership) as a newmodel has been widely used in public beneficial project, which attracted more andmore EPC (Engineering, Procurement&Construction) contractors to get involved in.The EPC contractors always participate in the above project with integratedconstructing and financing or investment conditions, which is an obvious strategicand farseeing action of exploring market and improving enterprise competency.However, the difficulty lies in the problems caused by the single investmentsubject and unreasonable risk allocation during the construction and operation period.Investment structure is considered as one of the critical factors for the success of PPPproject. Herein on the standpoint of the EPC contractors, the article mainly researchon the design of the investment structure on MSW treatment in PPP model, try toascertain the reasonable share of the investor in the project company through riskallocation management, in order to explore a feasible way for the EPC contractor andoffer the decisive and practical operation instructions to fulfill the win-win targets forall the parties concerned.Through research the feature of MSW Treatment project and market situation,also the main problems during the project financing and operation, the authorsummarizes the main obstacles of private capitals in participating MSW treatmentproject and the influence to the project, then pointed out the investment structure isconfirmed as the key element and the primary problem to be solved for such a kind ofproject.On the general principle of inductive analyzing the choice on the investmentstructure of MSW treatment in PPP model, by analyzing contract structure andfeature of participants, the author pick out government, engineering enterprise andspecialized environmental investment company as the three main investor in theproject company, confirming the risk relation and risk allocation among deferentinvestors, the questionnaire investigation and Markowitz Model, which was applied in security investment, were adopted to explored the proportional relationship withthe qualitative and quantitative way by fully analyzing the project risk, and clearingthe shareholding in the project company among government, engineering enterpriseand environmental investment company, which is41.7%,21.63%and36.67%.Finally, the obtained result are adopted into a practical project to prove itsapplicability, it laid the foundations of negotiation of agreement among differentparty.The study shows the analytic way on investment structure of the MSW treatmentproject in PPP model is feasible and the risk allocation is reasonable. It will beapplied to offer an investment structure design proposal for engineering company,and will make some direction effect in practical project.