Research On Decision-making Model On Portfolio Compensation For Rail Transit PPP Project Based On Option Games

Rail transit PPP projects are quasi-operating projects,and the operating income of the project cannot cover its investment costs.Determining a reasonable capital compensation plan is the key to ensuring the financial viability of such projects.In project practice,the government usually chooses to provide capital compensation during the construction period to make up for the lack of expected cash flow of the project.Simultaneously,because there is great uncertainty in the passenger flow of rail transit PPP projects,and this risk is not controlled by both parties.Passenger flow risk-sharing clauses are often embedded in PPP contracts;that is,the government needs to bear contingent compensation during the project operation period.The portfolio compensation is not only related to the balance of interests between the government and the private sector but also takes into account the balance between the current period(construction period)and longterm(operation period).Based on this,this paper uses the options game method to research the government portfolio compensation model in the life cycle of the rail transit PPP project.The specific research work is as follows:Firstly,given the decision-making problem of capital compensation during the construction period of rail transit PPP projects,the game theory method is used to construct a capital compensation decision model during the construction period.The decision-making process is divided into three steps: step 1,the game theory method is used to construct a dynamic game model with incomplete information,and the equilibrium solution of the return on investment of the private sector is obtained;step 2,a capital compensation quantity decision model is set up based on the benchmark conditions of government/private sector investment in such projects,and the feasible range of government capital compensation ratio is obtained;step 3,considering the different strategic behaviors of the two parties,a bargaining game model under incomplete information is established to get the optimal capital compensation ratio of the government.Finally,the model is verified and analyzed through a numerical case.This research provides a systematic theoretical method for the government to determine the amount of capital compensation.Secondly,in view of the contingent compensation decision-making problem during the operation period of the rail transit PPP project,the real option method was used to construct the contingent compensation decision-making model during the operation period.The decision-making process is divided into two steps: step 1,taking into account the high uncertainty of passenger flow,the real option method is used to construct a twovalue option model with contingent compensation during the operation period,and the risk-neutral adjustment is made to acquire the adjusted total option value;step 2,a decision model for the feasible region with contingent compensation during the operation period is established,and the feasible region with contingent compensation amount is obtained.Finally,based on the previous research,a decision-making model on portfolio compensation is constructed during the construction and operation periods of rail transit PPP projects.The decision-making process is divided into two steps: step 1,a capital compensation model embedded with contingent compensation in the operation period is established to get the feasible region of the government capital compensation ratio under the portfolio condition;Step 2,the equilibrium decision-making model on portfolio compensation is constructed,and the optimal combination solution of capital compensation during the construction period and contingent compensation during the operation period is acquired.Finally,a numerical case study is used to compare the research results of different models to verify the advancement and feasibility of the decision-making model on portfolio compensation.This research provides a theoretical basis for the government portfolio compensation for transportation PPP projects and broadens the research methods of government compensation decision-making for PPP projects.