Study On Risk And Investment Decision Of Urban Rail Transit PPP Project

With the rapid development of economy in China,the growth of population and travel demand has brought numerous traffic problems,i.e.,traffic congestion and environmental pollution.The urban rail transit system,which is effective and environment-friendly,becomes the preferred choice to cope with these problems.However,the construction and operation of urban rail transit is costly.Applying PPP(Public-Private-Partnership)mode can not only expand the source of funds of the project and alleviate the financial pressure of the government,but improve the efficiency of private capital and promote the development of urban rail transit system.Many risks exist in the PPP project of urban rail transit system.Only by correctly identifying the source of risks and effectively controlling it,can the PPP project of urban rail transit system succeed.The ultimate goal of private capital in PPP project is to obtain return on investment.Estimating the risks of private capital accurately and predicting the profit of PPP projects are the key factors that determine the willingness of private capital investment.This paper employs a SWOT analysis on introducing the PPP mode to urban rail transit project,and puts forward corresponding strategies to the government and the private capital.At the basis of system engineering theory,62 second-level risk factors of PPP mode in urban rail transit project are found by applying checklist-RBS method.Then,35 key risks,10 minor risks and 17 general risks are derived by using the improved risk matrix method.In view of 35 key risks,this paper determines the final risk factors,which would be taken by private capital separately or together.Finally,the risk factors that influence the cash flow of the project are extracted from the ones faced by private capital.Based on the indices including net cash flow,internal rate of return and payback period of the project,the project is simulated by Monte Carlo method.The probability distribution curves of the indices can be derived.According to the simulation results,this paper provides the private capital with decision supports.Results show that the PPP project of urban rail transit system is worthy of private capital investment.