Research On Financial Risk Conduction Mechanism Of PPP Project In China

The cash flow between PPP project and its stakeholders determines the essence of the financial risk conduction of PPP project.The features of PPP project such as the large amount of investment,the long length of the franchise period and the large number of participants decide that the financial risk exists objectively in whole life cycle of PPP project.The financial relationship network,which funded by the link of PPP project cash flow gathers a large number of PPP project participants.Financial risk is spread within the financial relationship network through the cash flow.If the dynamic conduction process is not monitored and prevented,it may lead to the failure of PPP project and the loss of the participants' interests.Therefore,this paper chooses the financial risk conduction of PPP project as the research object.The research perspective will be placed in the PPP project whole life cycle,by analyzing the financial risk of cash flow throughout the PPP project whole life cycle,core stakeholders and PPP project between the whole process of conduction mechanism using the system thinking and the system dynamics.Based on the research and analysis result,the following main conclusions are obtained:Firstly,through the theoretical analysis,it is concluted the main cash inflows and cash outflows of PPP project whole life cycle,and clarified that core stakeholders of PPP project financial risk conduction are the govern ment,the investor,the contractor,the operator and the financial institution and concluded that the conduction source,conduction carrier,conduction path,and figured out that conduct source,conduct carrier,conduct path and conduct result are the basic elements to realize the conduction process.Secondly,by analyzing of PPP project financial risk conduction mechanism.It is concluted that the financial risk source of PPP project is core stakeholders,Its financial activities will cause the financial risk.And in PPP project,the core carrier of financial risk conduction is the cash.Cash flow is the conduction path of financial risk,and financial risk is conducted through the cash flow between PPP project and core stakeholders in whole life cycle of PPPproject,which result in conduction results that making the PPP project cash flow fluctuations and the interests of core stakeholders to deviate from their expectations.Through constructing the system dynamics model of China's PPP project financial risk conduction,using the national stadium as a case of simulation,it is drawn the following conclusions: The investment in construction project has the greatest impact on the financial risk of PPP project and the financial institution;The project operating income has the most significant impact on the investor's risk;For the construcor and the operator,the proportion of equity investment has the greatest influence on its investment risk;For the government,the maintenance of PPP project has some impact on its risk;Long-term borrowing rate changes have the least impact on the financial risks of PPP project and core stakeholders.And on the basis of the case simulation,it is inspired to give some advice to prevent the financial risk of PPP project.