Risk Management of Investment and Financing of Urban Rail Transit PPP Project in China

Using PPP mode to build urban rail transit projects can solve the government’s financial problems and mobilize social capital at the same time, which can achieve a win-win situation of public and private. Practice shows that reasonable risk management is the key to the successful PPP mode. The paper focuses on the risk management of PPP mode in urban rail transit projects in the following aspects: risk identification, risk assessment, risk sharing and risk response strategies and actions in the whole process of investment and financing of the project which means the whole process of the project. First, the risk checklist method and the work breakdown structure method are used to get the risk list of China’s urban rail transit PPP project. Secondly, the questionnaire is distributed and the expert scoring method is used to sort the occurrence probability and damage degree of the risk items in the list of risk. Then, Pareto’s law is used to assess the key risk factors, important risk factors, secondary risk factors. Thirdly, on the basis of existing research, the principle of risk sharing is clarified and various risk subjects in PPP projects of urban rail transit are determined. For the risk which needs to commit jointly, to use AHP method to determine the specific share ratio, and make Beijing Metro Line 4 “force majeure risk” as an example. Finally, put forward the strategies and measures to deal with all kinds of risks. This study has practical value in providing guidance for the practical work of risk management of urban rail transit PPP project.