Research On Key Evaluation Factors Affecting Loans Application For PM Railway Projects In Country A

Enhancing the level of economic and trade cooperation between China and Africa is an important part of the"One Belt,One Road"initiative.However,after the development of China's aid to Africa in the past half century,Sino-African relations have entered a new historical period.China's international economic and trade cooperation and foreign investment are gradually tilting toward Central and Eastern Europe and Southeast Asia,the China-Aid project in Africa is decreasing,the competition about low-interest loan and preferential loan is becoming stiff due to the restrictions on the total loan amount of Chinese policy banks.The large-scale infrastructure projects are most affected by the decreasing of the low-interest loans of Chinese policy banks due to the huge investment amount,long payback period,and low internal rate of return of the project.PM railway project in African country A is one of them who plan to apply for loans from Chinese policy banks.This paper firstly analyzes the characteristics of PM project,Chinese policy banks'project approval process and key aspects of the approval,then refines three aspects of which Chinese contractors could improve the results,including project financial evaluation,national economic evaluation and risk evaluation.Subsequently,the author summarizes the research status of method of the above three aspects by reading a large number of documents and selects evaluation methods applicable to PM project among many methods.On the basis of study methods selected,this paper uses the expert's empirical data,Chinese contractor's data and industry data of country A and China related to PM projects to conduct financial evaluation of PM railway project.Then it analyzes national economic costs and national economic benefits of PM railway project to do the project's national economic evaluation.These studies show that the project has certain economic feasibility and national economic feasibility,but the project return is relatively low,and the anti-risk ability is poor.In this regard,the paper proposes suggestions for improving the results of financial evaluation and national economic evaluation of the project,these suggestions include:planning a package of supporting projects for the PM railway project,providing project operation by the Chinese contractor,building the project with Chinese technology,playing the effect in the serialization of railway networks,designing better model for different projects,cooperating with industrial partners etc.According to results of the financial evaluation and the national economic evaluation,this paper adopts the risk classification method used in the China policy bank during the project examination to identify the project risk factors based on the situation of country A and the PM railway project.The risk probability is performed using the expert scoring method,and the risk impact is evaluated based on the results of the sensitivity analysis.Then the author builds the risk matrix to assess globaly all risks identified,such as national risk,technology and completion risk,natural disaster risk,operational risk,exchange rate and swap risk,and obtain the rating for each risk.Applying methods such as avoiding risks,transferring risks,accepting risks,stocking risks,and mitigating risks,this paper propose risk responses,including purchasing insurance from China Export&Credit Insurance Corporation,preparing for refined projects,signing project exclusive clauses,establishing strategical base for a long-term development,setting up tariff adjustment mechanism and using financial measures etc.Through the research in this paper,the author hopes to put forward effective proposals for large-scale infrastructure projects to so that this kind of project can successfully pass the approval of Chinese policy banks and achieve financing closure.This has certain guidance and reference significance for Chinese contractor enterprises to promote projects which apply for Chinese policy bank loans under the new domestic and international economic and political environment.