A RISK-BASED INTEGRATED MODEL FOR FINANCIAL EVALUATION OF PUBLIC–PRIVATE PARTNERSHIP (PPP) PROJECTS IN THE TRANSPORT SYSTEM

Abstract

This article proposes a new Risk-Based Integrated Model (RAIM) for the financial evaluation of Public–Private Partnership (PPP) projects in the transport system. The model integrates three traditional methods Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period into a unified analytical framework that incorporates risk analysis through Monte Carlo simulation. This approach allows for a more comprehensive assessment of project sustainability under economic and operational uncertainties.
An empirical analysis based on the Hanoi–Vinh high-speed railway project demonstrates the model’s applicability. Using hypothetical cash flow data, the results show that the project’s NPV equals USD 1.25 billion, IRR reaches 11%, and the Payback Period is 12 years. In a risk scenario with a 15% decline in passenger demand, the NPV decreases to USD 950 million and IRR drops to 8%. These findings emphasize the importance of government subsidies and balanced risk-sharing mechanisms in maintaining project viability.
The scientific novelty of this study lies in introducing a risk-adjusted integration of NPV, IRR, and Payback Period methods, offering a multidimensional and practical tool for PPP project evaluation and contributing to the sustainable development of transport infrastructure.