Investment risk assessment of social capital in urban rail transit Public-Private Partnership projects

Abstract

ABSTRACT The Public-Private Partnership (PPP) is one of the crucial ways to promote the advancement of the Urban Rail Transit Project However, investing in such projects exposes social capital to tremendous risks. To analyze and assess the investment risk of social capital (IRSC), this study utilized the system dynamics (SD) approach to construct an investment risk model. Subsequently, combined with the practical project’s information, the investment risk was assessed, and the impact of boundary risks on the different risk subsystems was analyzed. The results demonstrate the following: (1) the investment risk system comprises three risk subsystems, namely, operating cost, operating revenue, and government subsidy. Among them, the subsidy risk subsystem most significantly influences the IRSC. (2) Of the boundary risks, the design risk and the contractual risk are the most vital factors in preventing and controlling the IRSC. (3) Differences exist in the boundary risks that most affect the regulation of the three risk subsystems. These findings can help social capital determine risk changes and effectively mitigate investment risk. This ability can further attract added social capital into such projects to facilitate the sustainable development of urban infrastructure.