Study On Risk Decision Of Social Capital Investment In PPP Project Of Water Conservancy Project

The hydraulic engineering plays a decisive role in national economy and social development.It is hard to meet the needs of water conservancy constructions if the construction is merely relied on the traditional financing mode.Therefore,social capital participated in water conservancy construction is imperative under the circumstances.The final purpose of the investors’ participating in the construction is seeking benefits.And high benefits mean high risks.The way how to reduce investment risks through using a reasonable investment decision in order to help the water conservancy projects to maximum the investment benefits has became the primary goal pursued by social capital investors.This research,combined with the characteristics of water resources PPP model and the ultimate goal of social capital investors,analyzes the characteristics of PPP project and investment risk from the perspective of social capital through summarizing and comparing the advantages and disadvantages of risk decision-making methods.It also classifies and summarizes the investment risk of water conservancy PPP project.Meanwhile,this paper introduces the concept of risk degree to describe the risk.Bayesian Decision Theory is chosen as the method of social capital investment decision to suit for the PPP project of water conservancy project.The advantage of the theory is combing the subjective judgment probability of investment decision makers with the results after investigating and analyzing so that,the investment decision can be more accurate and low-risk.This paper takes the risk factor of PPP project investment as a basis and then uses the Bayesian Decision Theory and the utility theory to build a investment decision model.An theoretical method which is provided for the social capital investors through research and discussion can decrease the social capital investment decision’s risk degree of water conservancy PPP project.And using an application example to verify the maneuverability of the theoretical method.