Study On Economic Risk Management Of PPP Project Of Feasibility Gap Subsidy Class At Decision-making Stage

PPP is a model for the government and the private companies to work together to complete the construction of a project.It is actually an innovative method of financing,which is widely used in the constructions of national infrastructure.With this model,both the government and companies take full advantage of their respective strengths.The government has a strong risk-bearing capacity and reliable credit.The private companies have enough capital and are innovative.As a result,the government can cut down its fiscal spending by using the idle private capital.At the same time,these private investors can be fully mobilized.In addition,it can also help the government to introduce more advanced technologies and acquire more practical experience.Nowadays,with the process of urbanization,the construction of infrastructure projects is the basis of economic development.The PPP model can serve urban infrastructure better.There are far too many kinds of risk in the implementation of projects.Therefore,this essay mainly focuses on the Viability Gap Funding(VGF)of PPP projects at the decision-making stage.In this type of PPP project,the user cannot pay part of the project company's input so the company should get reasonable compensation.At this time,the government will give the project company appropriate financial subsidies through financial subsidies,concessional loans or other preferential policies.This research is being conducted around two main issues at the decision-making stage.First,is there value in the project itself?Second,can the government afford the gap subsidy?From the perspective of the general contractor of the project,this essay identifies the main risks of the PPP-type projects as policy risks,value risks and financial risks and then constructs a risk assessment system for such PPP-type projects.A case study on M Enterprise Demonstration Park is also presented.In the end,in order to deal with the risk of PPP project in the decision-making stage,a practical operational method is put forward.Contractors can take reference from this paper to carry out risk management.