Evaluation Of The Franchise Of PPP Project Based On Real Option Method

With the rapid development of China's economy and the growing demand for public services,the past model of relying on the government to build infrastructure projects is far from meeting the needs of the public.The PPP model can effectively address the financial shortage of local governments,improve the efficiency,quality and quantity of services,and accelerate the process of infrastructure supply-side structural reform,so the PPP projects has developed rapidly.There are also policies from the central to local levels that strongly encourage and support for the operation of normative PPP projects.The number of PPP projects has increased in our country since 2013.So,the evaluation of the franchise of PPP project becomes a key issue for social investor,government and investment banks in the investment and financing of PPP project.Because the PPP projects are an emerging project in recent years,the experts and scholars have less research on the value evaluation of the franchise of PPP project,and the researchs are mainly about the traditional highway,subway and sewage treatment and other areas of franchise projects.Especially for the new non-management model of the sponge city,Education Park,The cultural stadium and other projects are less involved.At the same time,the value evaluation methods have many limitation.In addition,there is no unified valuation model,and the PPP franchise Division rate of the calculation does not have an accurate conclusion.In this paper,based on the present research situation,in view of the large scale of the PPP project investment,the long franchise period,the numerous risk factors and the irreversibility of the investment decision,the real option method is adopted to improve the inherent defects of traditional income method,and to analyze the value of the franchise management of PPP project.First of all,this paper analyzes the franchise rights and franchise value of PPP project,mainly from the classification of the franchise management of PPP projects,the formation of the value of franchise management of PPP projects,the characteristics of value evaluation and the value evaluation methods in four aspects.Secondly,the real option method is introduced into the valuation analysis of the franchise management rights of PPP projects,which is mainly from the option characteristic of the franchise right of the PPP project and the advantage of the real option method to be applied in evaluation.Thirdly,this paper chooses the appropriate option pricing model,and constructs the value evaluation model of the franchise of PPP project based on real option method,and gives the method of determining the specific parameters,especially the method of determining the share rate of franchise rights.Finally,taking the PPP project of sponge city in Chuxiong city as an example,it is evaluated according to the real option method evaluation model.In the analysis of the evaluation cases,it is found that the real option method is necessary and advantageous to evaluate the franchise management value of PPP project,which can take into account the potential value of project risk and flexible decision,and make the evaluation result closer to the real value.It is hoped that it can provide a practical and effective value reference for government and social capital and provide assistance and reference for the evaluation of franchise value of PPP project.