Study On Investment Value Of PPP Highway Projects Considering Governments Bilateral Guarantee Options

In the past ten years,the development of expressways in China has been rapid.Every year,thousands of kilometers of new expressways have been built.The investment in expressway projects is large and the risks are high.The government encourages social capital to participate in highway life cycle management through the PPP model,including participation in project investment,construction,operation,and maintenance.The government and social capital have their respective advantages to further improve the overall quality and efficiency of highway service provision.This paper introduces the theoretical basis and pricing model of real options,and points out that the traditional methods for evaluating the investment value of expressway PPP projects have their limitations.It is necessary to combine traditional DCF methods with real option methods because the method of real options can exploit the flexibility of the project.Value,then,this paper summarizes the general procedure for calculating the investment value of expressway PPP projects based on the real option method,analyzes the factors affecting the investment value,identifies and selects the real options,and points out that the real options are linked,between the options The relationship is also very complicated.Therefore,it is very difficult to calculate all the real options in the highway PPP project.In the operation stage of expressway PPP projects,the risk of traffic volume is an important factor affecting returns.In order to control risks and increase investors'willingness to invest,the government often chooses to guarantee the traffic volume in the concession agreement.This paper analyzes the option attributes of government guarantee value,and details the method of using real options to calculate the government's guarantee value for traffic volume.It models the minimum traffic guarantee option value and the excess traffic guarantee option value,taking into account the government and investment.During the process of party consultation and negotiation,a bargaining game model was adopted to design relevant risk sharing strategies,the government's bilateral guarantee value model was optimized,and the value of the compound real options was finally calculated.The investment value of the highway PPP project considering the government's guarantee options was further studied.Different levels of government guarantees and different government preferences under the bilateral guarantee value provide reference for highway PPP project traffic volume risk response strategies and project investment value evaluation.Finally,based on the risk sharing strategy and government guarantees,applied to a specific case analysis of a highway PPP project,the Monte Carlo method was used to simulate and predict the traffic volume,and then the government's bilateral guarantee option value was calculated,and the government guarantee was considered.Expressway PPP project investment value of option indicates that when calculating project investment value,real option is introduced,and the value of the project obtained is closer to the actual value.