The Study Of Investment Decision-making In Sewage Treatment PPP Project On Fuzzy Real Option

With the development of economy,project financing represented by the PPP method is increasingly being applied to the field of infrastructure construction.However,due to the large investment,long cycle,strong phase,and fluctuation of income of the PPP project,the traditional net present value method ignores the flexible value of the project in evaluating such projects.As an emerging investment decision-making method,fuzzy real option theory is gradually acknowledging the shortcomings of the traditional investment decision-making method represented by the net present value method,and developed on the basis of real option theory,in evaluating the uncertainty with flexible value.Firstly,after introducing the theoretic basis of the PPP mode insewage treatment project,this thesis gives the history and present state of sewage treatment PPP project as well as the financing characteristic of it.Then the traditional decision-making methods of PPP project with both static and dynamic analysis methods are mentioned,where the thesis clarifies the defects of traditional methods.Then a new investment decision-making method is introduced.The differences between the finance option and real option is summarized,presenting the advantage of European option over American option in real optionmodel.Real options in every phase of PPP project is given,presenting the importance of call option.For the characteristics of PPP project investment decision-making,here comes the fuzzy real option investment decision model.Finally,taking the PPP project of a sewage treatment plant in Sichuan as an example,the thesis use the three methods mentioned to evaluate the investment decision separately.With acceptable computation theresult is more in line with the real situation,and it is also inspire the private sector.