道桥外文翻译发展中国家公路BOT方案的经济评价.docx

1、道桥外文翻译发展中国家公路BOT方案的经济评价附录1 英语翻译FINANCIAL EVALUATION OF ROAD PROJECTS UNDER BOT SCHEME IN DEVELOPING COUNTRIESABSTRACTThe past decade has witnessed many developing countries opening up their economy resulting in greater private sector participation in road infrastructure projects. These countries tra

2、ditionally followed economic evaluation for the project appraisal. The economic evaluation includes intangible costs and benefits of the project which do not appear in cash flow statement. Hence the economic evaluation cannot indicate the financial performance of a project. Therefore, financial eval

3、uation is important in the context of privatization and commercialization of road projects under BOT scheme. Even though such approaches are very common in developed countries, the financing methods, tax rates and accounting techniques are quite different in developing countries. Therefore, to exami

4、ne the financial performance of the project and to determine the risks involved, sound financial model are necessary. This paper presents a simulation based financial model for BOT projects. The model takes the length of road, cost of construction volume of traffic, mode wise toll rates and other pr

5、oject specific details as input, performs financial evaluation, and calculates IRR and NPV for project and equity separately. In addition, the model also performs sensitivity analysis and scenario analysis on critical project parameters. A case study of a 40 km road expansion project from Pune (Indi

6、a) has been taken to demonstrate the working of the simulation model. The model gave financially sound project and equity IRR. The sensitivity analysis showed volume of traffic and toll rates as the most sensitive parameters to financial performance for the given project.INTRODUCTIONStudies show tha

7、t transport generates growth by facilitating trade, both nationally and internationally, and by increasing access to health and education facilities as well as local and national amenities. At the macroeconomic level, cross-country studies have confirmed that investment in transport raises growth by

8、 increasing the social return to private investment. On the other hand, at the microeconomic level, transport improvements directly lower agricultural input prices and hence production costs, increase access to markets and hence diversification of outputs, and indirectly facilitate the development o

9、f the nonagricultural rural economy1. The importance of transport does not diminish as countries industrialize. International trade in merchandise, and by implication the movement of goods, grew on average throughout the world by 4.9% per annum between 1980 and 19922. Until the 1980s, transport infr

10、astructure in developing countries was primarily provided by the public sector, for all modes of transportation. In transport service provision, railways were usually a public sector monopoly; while the air and maritime transport, were also usually in the public sector. In contrast, in trucking, bus

11、 and inland waterway transport the private sector was predominant3.Since the amount of resources, going into the transportation projects is very high; these projects need to be evaluated in comparison with other infrastructure projects as well as among themselves. The whole process of project evalua

12、tion is known as project appraisal. One of the important parts, of project appraisal report is the economic evaluation. The economic analysis compares alternatives, which, helps planners choose the best way to accomplish their objectives4. The most widely accepted parameters describing the economic

13、performance of the project are Benefit-Cost ratio and Net Present Value5. However, engineering-economic analysis is an advanced tool developed by World Bank keeping in consideration the factors that are relevant but not captured in benefit-cost ratio6. Since commercialization of transport projects i

14、s being done, the financial evaluation is also an important aspect of appraisal report.Financial Evaluation in Context of Developing CountriesThe transport infrastructure projects forms the basis of countrys economic growth and hence government needs to exercise control over them, but the investment

15、 requirements to fulfill the demand is far too large compared to what governments could provide. Due to this, the transportation sector had seen commercialization since last few decades. Since, the incentive for private players to step into the road sector is the return on investment; the financial

16、analysis becomes extremely important. The financial analysis over the life of the project enables the developer to measure the risk on returns and provides an insight into the financial viability of the project.The analysis of projects is necessarily based on uncertain future events and involves imp

17、licit or explicit probability judgments. There is considerable uncertainty in the capital cost estimates. It is not unusual that road designs, on which the cost estimates are based, may be changed during construction. This necessitates sensitivity or switching value analysis to minimize risk7. The r

18、isk analysis gives critical variables and assesses how likely deviations are, and identifies the factors that are likely to create the greatest risks forthe project.In developed nations, the models to evaluate the financial performance of Build Operate and Transfer (BOT) projects already exist. In U

19、K Net Present Value (NPV) of the cashflows is calculated under different scenarios as a measure of financial performance of the BOT projects8. However, in France Internal Rate of Return (IRR) is also used along with NPV for financial analysis of the project9. Since, infrastructure projects are quite

20、 different from industrial projects; the government laws related to issues like depreciationand tax are also different. Such models have to be developed keeping in view the laws affecting the cashflows of the project. But in developing countries like India, use of such models is very rare. The paper

21、 discusses financial evaluation of BOT projects in developing countries especially India where public sector is slowly opening up for private players. Over the years, the government policies in developing countries like India have changed to promote private sector involvement. For example, in India

22、road sector BOTprojects get tax benefit under section 80 (IA) for eight years in a row. They are also allowed to provide depreciation using “sinking fund” method and carry forward their operating losses during first eight years of operation. Another important issue pertaining to BOT project is estim

23、ation of traffic and toll rates. For instance, in India, two wheelers are toll free in most of the BOT projects. However; they constitute nearly50% of the total traffic volume in many instances. This becomes even more critical keeping in consideration the limited data available for traffic projectio

24、ns and standard of “willingness to pay” in developing countries. This necessitates the sensitivity and scenario analysis of volume of traffic and toll rates. This paper presents a financial evaluation model using simulation methodology addressing the abovementioned issues. The working of the model i

25、s demonstrated through a case study.THE BOT SCHEMENumerous forms of private participation have been experimented with an unequal record of success10. The Build Operate and Transfer (BOT), is the most familiar form, whereby the project is developed by the private sector. It takes the responsibility f

26、or funding, designing, building and operating the facility for sufficient period, to service and repay the debt raised, then control is transferred back to public sector11. The main parties involved in BOT project can be broadly divided into five categories: Granting agency,Concessionaire or Promote

27、r or SPV (special purpose vehicle), Financiers, Consultants & Contractors and Road users. The granting agency provides the contract to the concessionaire to design, built and operate the facility. In return, the concessionaire collects the toll from road users for a specified time called concession

28、period. The revenues produced are used to payback the financiers.Since, infrastructure projects are capital intensive, financing of funds is one of the important issues. Private financing and raising resources for such projects is a challenging task for the private sector. The traditional sources of

29、 funds for BOT projects are Debt and Equity12. Financial institutions in India favor low Debt/Equity ratio, and for BOT projects in India, this ratio usually varies in the range of 1.5 to 2.3. An important feature is the construction period since, in public sector projects, time overrun is a usual p

30、henomenon. However in BOT projects the concessionaire pays special care to this as any time overrunwould reduce the profitability of the project and increase the interest commitment on debt. In addition, there is an incentive to finish construction ahead of time and avail the maximum benefit by oper

31、ating and collecting tolls for a longer duration of time12. Another relevant issue pertaining to BOT projects is toll charges since, user charges forms the major part of revenues collected. The determination of the toll rates demands due consideration from granting agency as well as from concessiona

32、ire. Levy of minimum tolls is a desirable social objective of the government13. A very high toll rate may also divert the traffic to other toll-free roads especially, in case developing countries, where the willingness to pay is very less.Financial EvaluationThe financial analysis consists in compar

33、ing revenue and expenses recorded by the concerned economic agents in each project alternative (if relevant) and in working out the corresponding financial return ratios. The process of financial evaluation consists of estimation of cash flow and calculation of performancemeasuring factors.The cash flow statement presents cash inflows and outflows for