Research On The Concession Period Decision-Making Model For PPP Utility Tunnel Projects Based On The Game Theory

Utility tunnel refers to public box culvert tunnel with the comprehensive system like drainage,lighting,communication,surveillance system,which contains various kinds of utility lines in power system,telecommunications,water supply system,natural gas system,traffic signal system,closed circuit television system and so on.This kind of emerging public infrastructure has advantages of avoiding repeated road excavation,mitigating city visual pollution,protecting the city environment,improving city energy supply and ensuring city's safe operation.Utility tunnel is one of the symbols of modernization,technicalization and intensification.It makes full use of city's underground space and become a new trend of utility lines integration.In the past 20 years,although,local governments have taken efforts to explore,study and plan the construction of utility tunnel,the development of utility tunnel is still slow with many difficulties as a whole.It twists and turns based on discussion between academic group and government decision-making group.The essential cause of this problem is that the preliminary construction costs and managing costs in later stage is huge,which can't be afford by government finance.As a new project financing and construction method,Public-Private Partnership can lead social capital to infrastructure construction,which can release government's financial pressure.Therefore,this method has drawn more and more attention from the government.In utility tunnel's PPP financing method,the government decide project's investment though inviting bids and sign franchise rights agreements with investors..In order to help the company return investment,the units adopting the utility tunnels should pay fees for fitting into the utility tunnels and routine maintenance fees to the construction and operation company of the utility tunnel.After the franchise period,project company will hand over the utility tunnel to the government freely.Since China is still in the early stage of PPP development,we still have many problems in the utility tunnel PPP projects.One of the problems is the length of franchise period,which directly decide the operation time length and profits of investors.Therefore,research of franchise period time length has theoretical value T and practical significance in the utility tunnel PPP project.Based on the study results,this paper making deep analysis on feature of the PPP utility tunnel projects and the current game theory,building the decision-making model for franchise period on the base of game theory method,applying the model on a practical case,comparing the game theory method and net present value method,states the advantages of game theory method on franchise period decision.The paper includes five parts.Chapter one,introduction.This part introduces the realistic background and significant of the paper and defines the concept of PPP utility tunnel project and franchise period.It also summarizes current situation of utility tunnel development at home and abroad,the research situation and development trend of franchise period,and the structure,innovative ideas and limitation of this paper.Chapter two,Current situation and relative theory of the franchise period of utility tunnel PPP project.This chapter mainly introduces the traditional evaluating method and limitation of the franchise period of utility tunnel PPP project.Basic on these theory,this chapter analyses the utility tunnel PPP project with public product theory and game theory.Chapter three,PPP utility tunnel's franchise period decision-making model based on game theory.According to the profits analysis equation of government and project companies,this paper decides the franchise period length through subgame perfect Nash equilibrium.Chapter four,analysis of PPP utility tunnel's franchise period decision case.Taking the utility tunnel in Xiamen Xiang'An International Airport as an example,this part analyses various data of this PPP project,gets the franchise period length through applying franchise period model built on chapter three and compares it with the franchise period length from net present value method.Chapter five,Conclusion and suggestion.Summarise this paper and rise the conclusion.Figure out problems and issues faced by utility tunnel PPP project and make suggestions for government decision-maker..The innovation of this paper is that through discussing the feature of utility tunnel,this paper establishes the dynamic game model of franchise period between company and government according to the public goods theory,game theory and the relationship between construction cost of utility tunnel and project franchise period.After the dynamic game analysis,the paper concludes the subgame perfect Nash equilibrium between government's franchise period decision and construction cost of company's project.Also,the paper suggests that game theory is more proper than net present value on the current stage of utility tunnel PPP project.