Zhong Nan Coal Channel- Lanshan Port Railway Project Investment Feasibility Analysis

Railway as an important part of public transport, with characteristics in enormous investment, low yield, long investment recovery period, generally is funded by government. However, with the development of Chinese railway and policy adjustment, especially after the establishment of Railway Company, railway construction and management of the past policy oriented gradually shift to market-oriented. The new railway project is open to private capital, to encourage and guide non-public capital into railway infrastructure construction. On the one hand, the enthusiasm of private capital investment in railway construction has been mobilized, but at the same time, the feasibility of the new railway project is put forward to improve the accuracy of project financial evaluation and reduce the investment risk of the project.The Feasibility Analysis contains the whole technology and financial analysis of the project, the analysis of the operational effect of the project, and the operational effectiveness of the project after the assessment of the feasibility of the project in order to achieve the reasonable use of resources and not to deviate from the expected social and economic benefits. Financial feasibility analysis is an important part of the project feasibility analysis to ensure accurate, support financing channel and evaluation according to criteria and the necessary risk analysis. Railway construction project financial feasibility analysis is an important part of the feasibility report of the railway project construction, and also the key to decide the project investment. Financial evaluation of railway investment projects is a financial plan for the railway project, which aims to provide the project investors with useful financial information to guide the project investment and project investment decision.According to the coal channel- Lanshan port railway project, on the one hand, the necessity of project construction from the seat of the local economy point of view, this project can promote regional economic development along the line, complement the existing railway, improve the railway network in Rizhao area, and enhance the driving ability and radiation range. On the other hand, through the market investigation of the project, using the method of field research, expert interview and expert forecasting method forecasts the related data in project investment and construction period and operation period of capital recovery situation. According to the project construction milestone to determine the annual investment and reasonable use of funds, we through making a survey about the existing enterprises, the existing railway line combined with the relevant provisions countries and regions determine the actual situation of railway freight volume and freight.Using the financial evaluation index rule to calculate the internal rate of return, financial net present value, investment payback period, loan repayment period, the financial internal rate of return is 10.35%, higher than the railway industry benchmark yield. The financial net present value is 4,601,020,000 yuan, which shows the benefit is good. The investment payback period is 12.26 years, and the repayment period is 13.22 years. The project has a good liquidity, short payback period, and has a good operational feasibility and appeal to the supporters.Because the project is in the feasibility analysis stage, most of the data are from the previous engineering experience or expert advice, and the actual situation may have some differences, therefore, it is necessary to carry out the risk analysis of the project, determine the sensitivity factor for freight, freight, investment and operating costs, analysis of the project may face risks and put forward suggestions to improve the success rate, we should reduce the investment cost of the project, improve the project management capabilities. Using the profit and loss balance analysis to evaluate the risk of the project, the project profitability is good, and the feasibility of the project is demonstrated to provide basis for enterprise decision making and national audit.