Research On Risk Management Of Municipal Project Investment

The construction of municipal engineering projects is closely related to people’s livingstandards. Along with the accelerated process of China’s urbanization, the funding for theprojects’ construction is also increasing. To alleviate the financial pressures of the investment inmunicipal works, the state encourages exert the invest models which introduce private capital toinvest in construction of the projects. However, the characteristics of municipal engineeringprojects are that its duration is long and the amount of the investment is big, which determinedthat the projects’ implementation faces many potential risks in each invest model. Therefore, riskstudy is important for municipal engineering projects, and is an important guarantee for thesmooth implementation of them.First of all, this article introduces the foundation of the research, the investment mode usedcommonly in municipal engineering project (including the BOT model, ABS model, PFI modeland so on) and the content of risk management. Secondly, identify and assess the main risks indifferent investment modes of municipal engineering projects, finding that the projects alwaysexisting market risk, financing risk, interest rate risk, cost control risk, and so on, which wouldstall the project or make the related parties suffer economic losses. Besides, to avoid or reducerisks causing adverse effects, appropriate risk response measures can be taken to prevent andcontrol risk, such like, using financial derivative instruments to control interest rate risk, usingwarranty to deal with credit risk and so on. At last, studies the risks in the municipal engineeringproject of Zibo Taohuanshan Road, of these, using flow analysis method to identify risks in theproject, using fuzzy comprehensive evaluation method to carry out the risk assessment, andproposing measures for the risks at all stages of the project.