Research On Value Assessment Method For TOT Project Franchise

As people’s living standard has been improved in recent years, people pay more attention to their living situation, especially the urban public infrastructure. Accompanied by the growth of population, the public is badly in need of the urban public infrastructure. This put a huge pressure on the existing public infrastructure. Thus, the supply and demand relation of the public infrastructure unbalanced. Being one of the monopoly industries, the public infrastructure industry has been governed by the state-owned enterprises. It has been subsided by the government whether it gains or not. The lackage of incentive makes it face a serious situation.In order to solve the problem, the government releases some of the public infrastructure industry, using the method of franchising mechanism. Some independent third-party operators are granted the privilege to operate some certain utilities for a certain period of time, aiming to achieve a multi-purpose, such as meet the need of the public. TOT model is the unique one.TOT stands for Transfer-Operate-Transfer. Since introduced to China, it has been used widely, especially in the public utilities. The model has a definite starting point and ending point. It transfers the franchise right to an independent third party as the form of biding. In the limited period, the third party only owns the operating right, while the government has the ownership of it. How much does the franchise right values matters a lot. It influences the assessment of the right. As different purpose of assessment correspond to different method, thus forming different value, we have to make sure the purpose of assessment before choosing the best method.Among all the existing literature, there is no conclusion on the assessment method for the finite TOT project, but it is greatly in need in our real life. This paper aims at finding a scientific and reasonable assessment method for TOT projects. First of all, we have to make sure the assessment purpose.This paper is divided into seven chapters, the main content of each chapter is as follows:Chapter1IntroductionThis chapter starts with the background and significance of the research, then followed by the ideas and frameworks. Proposed on the basis of assets assessment, franchise rights and public infrastructure, the paper makes a conclusion:the TOT model is one of the methods to solve the serious problem.Chapter2The current situation of the related studyThis chapter describes the current situation of two studies:the asset assessment method of franchise for TOT project; the asset assessment of franchise for sewage treatment TOT project. After reading most of the related studies, I found few researches which is related to this paper. Most of them focus on the assessment method for tangible assets.Chapter3Theoretical AnalysisThis chapter begins with the definition of TOT project, franchise right and the valuation of franchise. Then it introduces the relying theories. The chapter highlight the TOT project, aiming to lay a solid foundation for the below analysis.Chapter4The valuation and its applicable methodsThis chapter analyzes the necessity and feasibility to the valuation for TOT project. Combined with the many factors that affect the franchise value of TOT project, the chapter clears the importance of the assessment method. Finally the chapter points out the applicable method for different situation.Chapter5The usage of the two methodsAccording to the principle of assessment, we have to choose a definite method for a definite purpose. As there are two cases for TOT project, the chapter introduces two methods from five aspects for the two cases, namely the cost method and the income method.Chapter6Case studyThis chapter describes a sewage treatment TOT project. On the basis of the above conclusions, the case chooses the income method. Then the chapter gives a estimation of the case.Chapter7Tips for the choice among different methodsThrough a summary of the above chapters, this part focus on the tips among different methods. There are two main contributions the paper contains:(1)This paper introduces the assessment idea to a new industry, forming a point which contains the assessment theory, marketing theory and environmental engineer. In this way, the scope of the assessment business has been broadened.(2)The research combines with the urban sewage charges, targeting at solving the real life problems. The most important is to provide a reference for public infrastructure industry which troubled in the similar situation.