Sewage Treatment Project Financial Evaluation Based On System Dynamics

Since the1970s, the industry of sewage treatment, as a classification of environmentindustry, gradually become the important aspect of promoting the growth of national economy,especially in recent years, as the country pay increasingly attention to environmental protection,the investment project of sewage treatment has became the focus of investors in the water sector.Again, the investing models of sewage treatment project are gradually evolving from invested bythe government in the early into a variety of investment models, the economic evaluation of theproject, especially financial evaluation, as a necessary component of project feasibility study,which studies the feasibility of the proposed project from the microscopic point of view. Atpresent, for sewage treatment project, the financial evaluation method mainly through surveyingthe collecting data, preparing financial statements and calculating a number of evaluation indexes,then judging its feasibility. The sewage treatment process is a special process, and the project alsohas its own complexity and characteristics.The method of study on practical problems using system dynamics can be following: first ofall, from the perspective of the questions, based on the interactions and relationships betweensystem behavior and its inner structure, to define the boundaries of the system; an then analyzesthe system structure considering main influence factors which the system involves; secondly,dividing the corresponding sub modules and drawing the causality diagram, setting up systemdynamics model, then putting each variable parameter into flow chart; finally the step issimulation and evaluation using the computer. This article analyzes wastewater treatment projecton the basis of the present development situation of sewage treatment industry and the systemdynamics principle, and to establish the evaluation model of sewage treatment project based onthe research of the internal and external affecting factors of sewage treatment project and usingsystem dynamics method.In this paper, we make XS sewage treatment project as an example, and carry on thesimulation through the investigation to collect relevant data for20years after the projectoperation, then analysis of the correlation curve and index of the simulation, and understand theeconomic benefit and feasibility of the project investment. Simultaneously the uncertaintyanalysis and sensitivity analysis of the project have been processed, and fully analyze thesituation changes of the emission factor and the change of water price on the net income and netpresent value using the SD simulation, which could provide scientific basis for the investmentdecision of investors, making the project assessment more accurate, more rapid and moreeffective.