Research On Financial Risk Based On Joint Venture & EPC Of A Line Metro Train In Pakistan

With the initiative proposed of“The Belt and Road",China's interconnection with countries along the route has becoming closer and closer.For Chinese companies that undertake international engineering construction,the joint venture cooperation model and the EPC general contracting model can meet the needs of current engineering projects overseas.More and more countries's large-scale infrastructure construction projects along "The Belt and Road" have adopted joint venture&EPC model.There are many successful cases in these projects using the joint venture&EPC model,but some projects have not achieved the expected results or even made their company suffered from financial losses.Therefore,the financial risks of the joint venture&EPC project shouldnot be ignored.The A Line Metro Train in Pakistan,is the first infrastructure contracting project with demonstration significance under "The Belt and Road" framework.It has a wide influence on the simllar projects,and it's experiences reflect the nomal case of these project Therefore,this paper takes the ALMT project as an example.Under joint venture&EPC model,how does it deal with the financial risk successfully might be studied.We reviewing the development process of the joint venture&EPC model,based on the literature,and summarizes the characteristics of the model.First we study the case,we introduce the construction background of the ALMT,.Secondly,we identify the financial risks of the model,identify it's financial risks from five major aspects:working eapital risk,cost risk,contract risk,exchange risk and tax risk.Third,carried out the causes of risk.Finally,we summarize the countermeasures for the ALMT how to deal with financial risks under the joint venture EPC model.The study found that overseas joint venture&EPC projects should comform a comprehensive risk management system,identify the types of risks accurately,evaluation the degree of risk and control the risk timely.Only in this way can we keep the project going orderly and regularly.The A Line Metro Train in Pakistan,is a model of China's "The Belt and Road”project and near the end.Its experience in dealing with financial risks has a positive reference for other similar projects.