Private Capital Rate Of Return On Investmeng In PPP Projects Based On The Perspective Of Government Regulation

As an effective way of delivering public infrastructure or services, the Public-private partnership(PPP) form of procurement have been studied and adopted in the last decades in China. PPP projects are usually more difficult to implement than other traditional procurement models because of their complexity. The related research on many aspects of PPP projects is numerous; however, actual empirical research studies in this research area are rather limited. Whether a PPP project can attract the social capital and be implemented smoothly or not,the first condition is whether exists a reliable,objective return on investment which could be put into practice. Therefore, the return on investment research of the PPP model has certain practical significance in this paper.From the perspective of government regulation, and to consider the game process between the government and social capital in the project, analyzing the factors affecting the level of return on investment, this article build return evaluation model based on competitive mechanisms under government concession. In the building process of model, first of all, the paper deduced the relation between the demand price through the principal-agent model, after that, based on the control model, as the marginal conversion price is equal to the relative benefits in the transaction,obtained permission return on investment.This research works around permission level of return on investment while private capital into the infrastructure field, mainly obtained the following conclusions: Firstly, many factors affect smooth implementation of PPP mode, such as risk sharing and concessions granted, which would eventually reflect the project’s return on investment; Secondly, this paper concludes that Ramsey price control based pricing is equal to the cost control, and linear prices reflect the price bargaining between government departments and the regulated sector. Finally, in this paper, the model which comprehensive considering some key factors such as the risk, the expected utility of the government department, cost, production, is different from the traditional cost-benefit method, which derived reasonable return on investment through the project output level, and the model has rationality by verifying.