BOT Model Of W Sewage Treatment Project Franchise Evaluation Research

At present,China is short of water resources,the problem of water pollution is very serious,and the discharge of wastewater has been at a high level.But in order to effectively alleviate the existing water environment problems in China,the government has launched many supportive policies in recent years,hoping to help the development of sewage treatment industry,especially the approval of the demonstration PPP project.At present,the BOT mode is a major financing mode in PPP projects,and it has been widely used in sewage treatment projects.However,due to the characteristics of sewage treatment projects,such as high uncertainty,large investment amount and long payback period,the government hopes to improve the efficiency of operation and management by introducing social capital through the BOT model,so as to reduce its financial burden and disperse project risks.In addition,due to the large demand for project funds,social capital also needs to raise relevant supporting funds from banks and other financial institutions in the process of project construction or operation.And it should be noted that in the process of these transactions,it is necessary to confirm that the transaction price is reasonable and accurate,and the main target asset in these transactions is the franchise of sewage treatment projects under the BOT mode.Therefore,in the BOT mode,it is very critical to accurately evaluate the value of sewage treatment franchise.Through the example of W sewage treatment project financed by the BOT mode,this paper introduces the relevant evaluation process and evaluation results of franchise in the project,and through the analysis of the case,this paper finds that there are unreasonable problems in the process of franchise evaluation,such as discount rate,expected excess return and discount time point.At the same time,due to the limitations of the income method itself,and a series of potential values brought about by the risk factors,investment flexibility and management flexibility of the franchise are not taken into account in the valuation.Therefore,the value of the franchise is not of reference value.In the fourth part of the article,the author not only redefines the relevant parameters,but also estimates the option value of the franchise by introducing the real option method,and uses Monte Carlo simulation to determine the volatility.Then through the comparative analysis of the evaluation results,we can find that the option value of franchise is bigger than that of franchise,so if we ignore the value of the installment right,the evaluation results will be too low,which will affect the investment decision of the users of the report.In addition,this paper also summarizes a series of matters needing attention in the evaluation of real option method,in order to facilitate subsequent researchers or evaluators to carry out relevant research and use.