Research On The Risk Sharing Strategy Of Infrastructure PPP Projects

Recently,the demand for telecommunication,transport,water and electricity infrastructure has rapidly grown with days due to the drastic increase in economic development.As the financing pattern can handle the fiscal pressure on the government,the problem of the ineffectiveness in use of funds and inefficiency in operation occurs in government-sponsored programs,PPP projects rise considerably.However,owing to the massive upfront investment for infrastructure and the relatively long payback period,risks happen inevitably on PPP projects,so one of the decisive components for the success of PPP projects is to determine the risk takers and risk allocation proportion.As for each PPP project,there are differences of the anticipation for the project,the risk appetite and the capacity of risk management among participants.And the fair risk allocation unquestionably raise the cost of project negotiation.Consequently,researches for the fair risk allocation are supposed to be made in order to improve the efficiency of negotiation.By generalizing the previous research,this paper focuses on further research for risk allocation.Firstly,according to the related domestic and overseas researches for PPP,the paper categorizes these research from risk identification,risk evaluation to risk allocation,and then summarizes the definition,the trait,the organization of PPP projects,as well as the trait and principle of risk allocation in PPP projects,laying the theoretical basis and paving the way for further research.Moreover,based on one risk identification method(risk stratification),this study also identifies and concludes the potential risks of PPP infrastructure projects in China.And this paper points out the key stakeholders of projects,illustrates the framework of three phases in risk allocation,classifies risks into risk assumption and risk sharing according to the process of allocating risk,builds mathematical model of the risk allocation of PPP infrastructure projects based on Stochastic Cooperative Games,which takes all the risks into consideration,and asserts risk allocation proportion.Finally,a case in Kunming National High-Tech Industrial Development elaborates the feasibility of that mathematical model.