The Research On Investment Decision Of PPP Project Of X Construction Waste Treatment

The "construction waste siege" has become an urgent problem to be solved in the construction of a "waste free city" as a result of the widespread promotion of urban construction.The government and social investors have recognized the franchise-based public-private partnership PPP model.The construction of a PPP project for construction waste disposal is a major step forward for Chinese cities in addressing the problem of"construction waste encirclement".However,the traditional net present value method is still used to make investment decisions for such projects,which is not conducive to investors making scientific decisions.As a result,from the investor’s perspective,the real option pricing method is used to quantify the project’s actual investment value in the face of uncertainty and to assess the project’s investment feasibility.Based on the analysis of the project investment activities in two phases,verify the critical price and expanding investment projects to expand the optimal timing of social investors for this project to provide more scientific investment decision-making advice,while also helping to promote real option pricing method in city solid waste recycling using the PPP project investment decision-making.This paper first analyzes the investment decision-making method of X construction waste disposal PPP project,identifies the real option type contained in a construction waste disposal PPP project as an expansion option,and demonstrates the applicability of the Black-Scholes option pricing model to the project’s investment decision-making.The real option method,rather than the traditional NPV method,is found to better reflect the characteristics of the phased investment and the investment’s uncertainty.The project investment value evaluation model is then built using real options,and the project’s actual investment value is quantified.The analysis reveals that the actual investment value of X construction waste treatment PPP phase I project based on real options is 4.5092 million yuan,which is feasible,contradicting the traditional decision-making method’s conclusion that the phase I project is not feasible.The project’s calculated total investment value and internal rate of return are 152.731 million yuan and 14.9 percent,respectively,higher than the traditional method’s 57.081 million yuan and 10.8 percent,enhancing the project’s economic benefits.Finally,the sensitivity analysis is used to identify the key factors influencing the project value and make recommendations for decision-making.When making project decisions,sensitivity analysis shows that social investors should pay more attention to changes in project earning capacity and sales unit price of recycled building materials.Under the current uncertain circumstances,the project can achieve the greatest economic benefit by delaying the expansion of production scale by one year,as planned.This paper offers investment decision recommendations for X construction waste treatment PPP project:the project is feasible;social investors should invest in the first phase of the project in early 2021,and waste treatment capacity should be increased to 3 million tons per year in early 2027.For project expansion investment,investors can use 70 yuan as the critical sales price.When the unit price of recycled building materials is less than 70 yuan,investors must increase the unit price of construction waste disposal service fee to make up the difference and ensure the 6.95 percent minimum acceptable rate of return.