The Performance And Risk Evaluation Facing Social Capital On PPP Investment

Since the promotion of PPP model by Ministry of Finance at 2014,PPP investment has been more and more popular.PPP model is an institutional innovation in infrastructure investment and public service supply area,which is also an institutional innovation on social capital utilization.PPP model is of great historical significance on optimizing resources allocation,balancing the short-term and long-term fiscal expenditure and promoting urbanization.So far,the research on PPP mainly focus on fundamental theories and its implmentation.How to conduct an effective financial feasibility from the social caPital perspective is still a key subject worthing exploring.The research tries to reveal the problems facing social capital during PPP assessment based on A Project.Located in JinPing district of Shantou city,Project A is a municipal engineering Project,including two municipal roads and a large bridge.After public bidding,the consortium led by B company wins the bid as social capital.Besides B,the members of the consortium include C design company,D construction company and E supervision company.The cooperation period of project A is 18 years,including three years of construction and 15 years of operation.The total investment is about RMB 1.54 billion yuan.Firstly,this paper briefly introduces the development and current research of PPP Projects.Secondly,based on the theoretical basis of chapter 1 and the background of Project A,the necessity and urgency of Project A is analyzed,then the financial evaluation content in the original feasibility analysis of Project A is introduced.Based on the problems in the original evaluation report,this paper reevaluates the financial feasibility of A PPP project,revealing the sensitive factors and related risks of PPP project financial evaluation through reasonable adjustment of evaluation elements.According to the current market environment,this paper will re-evaluate project A through traditional financial evaluation indexes such as NPV,IRR and investment payback period,and introduce uncertainty analysis tools such as sensitivity analysis and matrix analysis to reveal key sensitive factors and risk response strategies of PPP project financial evaluation.Through re-evaluation,it is concluded that the discounting rate and loan interest rate are the key factors to in the financial evaluation of PPP investment by social capital.Meanwhile,the stability of government fiscal revenue is also an important factor affecting the feasibility of PPP Projects.In order to improve the investment performance of PPP projects,social capital should chosse the reasonable sources of project financing and comprehensively explore the value of PPP project value chain.