The Research On Pricing Mechanism Of Expressway Concession Projects Based On PPP Mode

Concession price is the core issue of expressway PPP projects concession contractnegotiations, and it has attracted widespread attention in public utilities’ financing fieldsand theoretical circles. However, there still exist lots of failure cases due to improperconcession pricing in practice. In theory, we need to explore pricing methods to help thegovernment sector, the private sector and consumers’ interest get balance. Theinfrastructure nature of expressway decides PPP concession projects’ pricing should bereasonable, which plays an important role in promoting economic development andensures itself to develop sustainably and healthily. At present, there are still someunreasonable aspects in China’s expressway concession project and its concessionpricing. Therefore, further research based on expressway concession pricing theory andpractice at home and abroad is particularly important.This paper researches expressway PPP project. First，it introduces the PPP modeand public utilities concessionary management theory, and analyzes the feasibility ofexpressway using PPP mode. Second, it analyzes the main factors of expressway pricing,proposes a pricing model which comprehensively considers the cost of the project,investment income, risk factors, consumer benefit, and analyzes key parameters in themodel in detail. Third, it makes a case study of pricing model which based on Chengyuexpressway Chongqing section, and focuses on traffic volume and toll rates’ prediction.Results show that toll rates will be reduced gradually with the increase of expresswaytraffic volume, which consistent with policies that reduced expressway toll ratesappropriately in China in recent years. It also demonstrates that the pricing model isaccord with the reality.At last, the paper presents a price adjustment mechanism based on the pricingmodel and empirical analysis: First, adjust the model’s parameters in accordance withthe relevant stipulations of the concession agreement; Second, in order to performefficiently, government should make some policies to protect pricing adjustmentmechanism which including strengthening the government regulation, improving thehearing system, strengthening the cost review and developing service evaluation.