The Research On The Burden And Risk Managment Of Infrastructure Investment Projects

Since the eighties of last century, the fiscal budget towards the instruction of infrastructure has been increasing year after year, but financial grants and government loans alone are far from enough and investment in infrastructure are severely under funded. In the background that the pace of urbanization is accelerated, as well as the triggered global financial turmoil is triggered by the U.S. sub-prime crisis and hence the government make efforts to strengthen infrastructure to stimulate the economy, absorbing non-government funding for infrastructure projects to promote diversification of financing has become an important approach to speed up infrastructure construction.In order to ensure the achievement of the project financing and construction of the project with little difficulty, the Government usually provides a security to some degree. Compare to foreign countries, however, there are too many items of infrastructure in China and hence financing is difficult, a lot of which the market mechanism cannot work and the rate of return is low, when the Government guarantee for such projects, the financing difficulties are solved indeed, it also brings about contingent liabilities, even resulting in a burden on the government. Thus, it is necessary to make a scientific assessment and to prevent the risk of the security burden; accordingly, the main content of the research is project guarantee.Firstly, the situation of financing model of the project, the development of guarantee and operation mode of the security is analyzed, and the items, from the viewpoint of return of investment are divided into three categories according to the project distinction theory, and questions lying in the mode of operation are proposed as well as the urgency to solve them.Secondly, using the method of contingent liabilities, the reason why project guarantees often leads to burden on the government, according to the practice, the project guarantee is correspondingly divided into three styles, such as minimum-style guarantee, upper and lower limits-style guarantee and upper and lower limits-style guarantee in the times of proportion, and the likely properties of these project guarantee as options, meanwhile, the factors that affect the project guarantee are also revealed. Then the projects guarantees in different styles are assessed using the method of real option according to future of them, and the models focusing on the three kinds of security guarantees are established, the relationship between variables and the burden from project guarantee are explored with the help of example analysis and sensitivity analysis.Finally, based on the discussion towards the risk of project guarantee, the instruction of methods of risk management, the future of the object researched in the paper, the relationship between capital budget and investment decision, three strategy to prevent risk are postponed, from the viewpoint of non-government investment, using the method of real option and NPV, ensuring that the non-government investors'participation, the burden is locked in advance and risk is under effective control.At the same time, some items, such as the down boundary of the project guarantee and up boundary of the project guarantee and the scope of the agreed proportion are studied, according to practice, using the instruction and analysis of cases, this study aims to offer a reference for the government to make better strategy to guard against risks.