Quantitative Assessment On Value For Money For Urban Rail Transit PPP Projects

With the rapid development of economy and accelerating of urbanization, the demand for urban rail transit infrastructures is increasing strongly. However, relative shortage of government revenue government results that this need can’t be met in the short term. In order to provide urban rail transit infrastructures services as soon as possible, the government favors toward to Public-Private-Partnership (PPP) mode, which can introduce social captical to infrastructure. Nevertheless, PPP mode is only one of the options that can provides infrastructure products or services, the government can’t preference subjectively certain procurement mode or negate one, there should be a scientific and quantitative basis to judge whether this mode offers value for money (VFM).The main purpose of this paper is to develop a quantitative VFM assessment model for Urban Rail Transit Project in PPP mode by insighting into the basic theory of VFM. First of all, on the basis of analyzing the basic theory and practice of VFM quantitative assessment for PPP projects, this paper proposes the framework model of VFM quantitative assessment for urban rail transit PPP projects by combining with their basic operation mode and main characteristics. And then, composition and calculation model of PSC and PPP value (PPP value based on shadow bid and PPP value based on actual bid) was constructed, which are the two components of the framework model. Thus we constituted the complete VFM quantitative assessment model for urban rail transit PPP project.In addition, the quantitative VFM assessment is usually affected by many factors, in this paper, the most crucial factors which influenced the results of assessment, discount rate and risk analysis, were thoroughly analyzed. For the determination of discount rate, the paper analyzes characteristics of dicount rate which is commonly used in quantitative VFM assessment in some foreign countries, then combining with the characteristics of urban rail transit PPP projects, we choose risk-free interest rate as the conversion rate. For the Risk analysis, this paper identified 32 risk factors existing in urban rail transit PPP projects by literature survey and WBS-RBS, then introduced the set-valued statistics to quantify risk and put forward risk sharing principle of urban rail transit PPP projects as theoretical foundations of risk sharing.Finally, the developed quantitative VFM assessment model was applied to Beijing subway Line 4 PPP project. According to the specific data of Beijing subway Line 4 project, this paper empirically studied applicability of the new developed quantitative VFM assessment model, and verified that this model is possible and applicative, it can provide scientific and quantitative basis for government to judge if introduce PPP mode to offer urban rail transit projects.