A Study to Develop the Instructions for Setting Discount Rate in VfM Assessment of PFI Projects in Taiwan

• Main Authors: Yang-Shu Ya, 楊淑雅
• Other Authors: Chou Hui Yu
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/88081875486468112548

碩士 === 朝陽科技大學 === 營建工程系碩士班 === 100 === 　　Governments around the world generally make many efforts to invest in infrastructures for improving public services and pushing forward the national economic development. With the promulgation of the Law for Promotion of Private Participation in Infrastructure Projects, the concession model has been used in Taiwan to bring private finance into public infrastructure projects with self-financing ability. However, the amount of contracted concession projects has been decreasing year by year. This downward trend shows that the existing concession model has its limits, especially for those social welfare facilities without self-financing ability. 　　The private participation model implemented in infrastructure and public service projects can be divided into two major systems: “concession model” and “PFI (Private Finance Initiative) model“. PFI model, the subject discussed in this research, has been introduced in more than 30 countries all over the world. It has not been applicable in Taiwan yet, but it is broadly regarded as positive to rapidly push ahead with the investment on infrastructure and public services, especially those with high public interests but low self-liquidity. Therefore, it is an important issue for Taiwan government to investigate how to introduce PFI model into domestic private participation system for social capital investment. Depending on different capital structures under various procurement models, the infrastructure or public service projects should be analyzed by different principles, for example, the discount rate. The influence of the discount rate over the results of project evaluation can be significant even to change the conclusion. However, there exists no standard for the calculation or setting of the discount rate, which means there is a lack of fair and consistent comparable basis among different projects or different proposals from bidders. 　　This research put the focus on how the discount rate should be set if PFI model was launched in Taiwan. The process and parameters of discount rate setting now used by Australia government were introduced here, which has a theoretical framework based on CAPM (The Capital Asset Pricing Model). Besides, “Public Construction Management Information System” developed by Public Construction Commission was used to collect historical data of six category of public construction projects, including building, road, railway, harbour, rapid transit system, and sewerage construction. The historical data were put into evaluation to measure the risk level and the beta coefficient (β) of each construction category. Thereafter the discount rate for each construction category of PFI project was suggested. The results gave the railway construction the highest β value 0.9 for its relatively highest risk level, and suggested its discount rate 7.15%. On the other hand, the rapid transit system was given the lowest β value 0.3 for its relatively lowest risk level, and its discount rate was suggested 3.55%. The results of this research are expected to be helpful for the authorities responsible for setting discount rates for PFI projects in the near future.