Study On Concession Period And Influencing Factors Of Sewage Treatment BOT Project

With the rapid development of the economy,the increase of population and the acceleration of urbanization,China's sewage discharge has increased significantly.Due to the huge cost of investment and construction of sewage treatment plants,it is difficult to meet the investment needs solely by relying on government financial funds.The BOT project is the government's right to grant construction and management rights to the project company during the concession period.It has the advantages of reducing government financial pressure and improving treatment technology,and is increasingly used in China's sewage treatment field.The concession period is the core clause in the BOT project franchise agreement,which determines the length of time the government gives the project company franchise rights,and is a key point in dividing the interests of the government and the project company.If the concession period is too long,the project company can obtain economic resources for a long time and damage the government's interests;if the concession period is too short,the project company may not be able to obtain the expected benefits and damage the interests of the project company.Therefore,the BOT project concession period should be determined according to the specific circumstances to ensure the division of rights and obligations of the government and project companies in the BOT project.Due to the different risks and uncertainties of the BOT project,the requirements of the length of the concession period are directly affected.Therefore,it is necessary to combine the actual conditions of the sewage treatment BOT project,fully consider the different influencing factors of the concession period,and seek a reasonable length of the concession period to avoid problems such as the operation of the BOT project being blocked due to improper division of rights and obligations between the two parties.According to whether the project company can change the value of the influencing factors of the concession period,and then affect the cash flow of the BOT project,the influencing factors of the concession period are divided into two categories:deterministic influencing factors and uncertain influencing factors.On the basis of the net present value method,the value of the real option is introduced according to the characteristics of the BOT project,and the calculation model of the concession period including the value of the "take-or-pay" principle is constructed.Taking the three sewage treatment BOT projects as an example,according to the original data of the BOT project and the assumptions of relevant parameters,the concession period calculation model established in this paper.Using the model to calculate annual equal amount of capital recovery for 20-30 years respectively include the principle of "take-or-pay" and do not include "take-or-pay".Then this paper determines the concession period of the BOT project.During the operation period,if other conditions are unchanged,the sensitivity analysis of each influencing factor is carried out,and the change of the annual equivalent recovery value is observed to infer the impact on the BOT project concession period.The results of the study show that the length of the BOT concession period considering the value of the "take-or-pay" principle is significantly shorter than the length of the concession period without considering the principle of "take-or-pay";the unit price of sewage treatment and the minimum guaranteed amount of water are negatively correlated with the length of the concession period;The initial investment cost,unit variable cost,annual fixed cost,and project discount rate are positively correlated with the length of the concession period.When there is a "take-or-pay"principle,it is difficult to infer the impact of the actual sewage treatment volume on the length of the concession period.