Quantitative Assessment On Value For Money For Municipal Roads PPP Projects

With the rapid development of economy and accelerating of urbanization,the demand for municipal roads is increasing strongly.However,relative shortage of government revenue can not be met in the short term.In order to provide municipal roads 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 Municipal Roads 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 PPP projects and VFM,this paper proposes the framework model of VFM quantitative assessment for municipal roads PPP projects by combining with their basic operation mode and main characteristics.And then,composition and calculation model of PSC and LCC value were constructed,which are the two components of the framework model.Thus we constituted the complete VFM quantitative assessment model for municipal roads 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 municipal roads PPP projects,we choose risk-free interest rate as the conversion rate.For the Risk analysis,this paper identified many risk factors existing in municipal roads PPP projects by literature survey and WBS-RBS,then introduced the set-valued statistics to quantify risk and put forward risk sharing principle of municipal roads PPP projects as theoretical foundations of risk sharing.Finally,the developed quantitative VFM assessment model was applied to PPP project of Yinan,in Shandong province.According to the specific data of Yinan municipal roads 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 municipal roads projects.