A Study On The Evaluation System Of Financial Capacity Of PPP

In the past 40 years of reform and opening up,China's economic level has been rising and infrastructure construction has gradually increased.However,local governments are unable to support the construction of public goods,and the government is struggling with providing adequate financial support and effective management.The introduction of PPP mode which contains social capital could not only alleviate local financial constraints,but also fully mobilize the enthusiasm of social capital participation,respond to the call for encouragement of social capital in China,and at the same time improve the quality of public goods supply and improve management efficiency.Before the implementation of the PPP project,it is necessary to demonstrate the financial capacity of the government to ensure that it does not exceed the financial capacity of the local government.For this reason,the Ministry of Finance has established a red line of 10%,requiring that the fiscal expenditure of all PPP projects in each year should account for the general public budget.Not more than 10%.However,judging from the current implementation situation in China,this red line has some limitations on financial affordability.In particular,there are many unreasonable points in the setting of the red line,which makes the financial affordability face many difficulties in the actual operation level.In this context,this paper mainly explores how to set up the financial evaluation system more reasonably.Firstly,starting from the problem of setting the red line,it puts forward the following problems: the control standard is single,and there is no flexible change according to local actual conditions.The financial affordability argumentation operation is arbitrary,not only the random selection of indicators,but also the arbitrariness of budget expenditure.The separation of individual PPP projects from the overall PPP project planning leads to a lack of long-term consideration.Therefore,it is necessary to expand the evaluation system to prove that the 10% red line is unreasonable and give a more reasonable measurement method.This paper introduces the analytic hierarchy process,analyzes the factors affecting financial affordability,and then builds relevant index system,expands the financial affordability system of the original PPP project,points out different red line standards,and uses the indicator system for Shanxi.The PPP financial affordability situation is forecasted and applied,and finally the local government proposes relevantcountermeasures and suggestions to achieve diversified control over the regional PPP financial capacity.The significance of this paper is to provide scientific guidance for the financial sustainability of PPP projects.According to the PPP's calibre,indicators are set up from multiple angles to evaluate the financial sustainability base,making the whole system more comprehensive.Provide reference for the calculation of financial endurance of local PPP projects in the future.Provide reference for the relevant departments and the community to choose the PPP model.After expanding the evaluation system,local governments can reasonably select and determine PPP projects and scale according to their own needs,and the system is more operational.The social investment entity can also choose the PPP project for investment more rationally,which has certain reference significance.