Study On Decision Of Concession Period For Rail Transit PPP Project

With China's economy development getting in a“new normal”scenario,the economic growth rate has gradually slowing down,in which the contradiction between urbanization and government financial shortage is getting worse.In order to improve the urban infrastructure and relieve the financial pressure of the government,a new model has been widely popularized,which called the Public-Private Partnership.In such model,The PPP model can effectively attract social capital and advanced technologies into public infrastructure projects.As a quasi-public social benefit project,the rail transit projects with a long lifecycle and a slow payback system,is a typically PPP project.This model can help the rail transit projects solving government financing problems,accelerate the process of urbanization,and increase the efficiency of infrastructure services.The concession agreement is a prerequisite and a core content for the construction and operation of rail transit PPP projects.It is an important parameter of the concession agreement,also it is an important way of determining the distribution of interests between the government and the social capital.Whether the concession period is reasonable or not,it is directly related to the success or failure of the entire rail transit PPP project.Traditional concession period decision model based on NPV method and game theory ignored the option value that is implied by the flexibility of project management.It makes the project value deviates from the actual value of the project,and cannot estimate the project value accurately.It leads to an unreasonable period of concession.This paper mainly describes the background,significance,themes and main contents of the concession period of rail transit PPP project.Literature review summarizes the current research status of concession period by domestic and foreign scholars;analyzes the current research progress and deficiencies;proposes the difficulties and puts up a key solution technologies and innovations.Furthermore,the theoretical basis of this paper is built up by the concept and characteristics of the railtransit project,classifications of PPP model,concession period agreement and concept of PPP projects.This paper also analyzes the defects of traditional concession period decision method and point out advantages of the options game method.Based on interest demand of the main participants of rail transit PPP project,the paper analyzes the real option characteristics and game characteristics of the concession period decision of rail transit PPP project.On the other hands,it designed a concession option game model without a government guarantee,and a concession option game model,in which the government sharing risks.The first-stage project of Lanzhou Metro Line 2 was analyzed by using this constructed model.Thereby,it got an impact from government investment ratio and return volatility in the concession period.In conclusion,the security measures are proposed from the construction to handover stages in order to make sure the effective implementations of a rail transit PPP project.