Value for money evaluation for conversion of highway stock project from BT model to PPP model based on improved risk quantification method

Abstract

With the accelerated urbanization progress, the governmental financial funds fail to satisfy the needs of highway project construction in some areas. The building-transfer (BT) model and public-private partnership (PPP) model have been carried out in succession in China to solve the shortage of financial funds. However, the emotion analysis method in Guide of Value for Money Evaluation for PPP Project (trial) enacted by the Ministry of Finance is of great subjectivity when applied to the calculation of risk quantification, which is the key to quantitative evaluation, so it is in urgent need of perfection through scientific methods to promote the implementation of PPP projects. On this basis, under the research background of conversion of a highway stock project from BT model to PPP model in city Z, the fuzzy analytic hierarchy process (HAHP) and set-valued statistics method were applied to the method improvement for the risk quantification part of value for money (VFM) evaluation cases in this project. The results show that the VFM (calculated based on the improved risk quantification method) of the BT-to-PPP model for the highway stock project in city Z is elevated from the original 248,240,000 RMB to 271,643,500 RMB. The conclusions can provide a certain reference basis for further improving China’s VFM evaluation system, and boosting the development of PPP model in China.