Consummating the Financial Management System of China Railway Erju Group Corporation’s BOT Project
|School||Southwestern University of Finance and Economics|
|Keywords||China Railway Erju Group Corporation (CREGC) BOT project administration Financial management|
After 1980s, some new invest modes like BOT gradually appeared in our country. BOT (Build-Operate-Transfer), as a kind of project financing mode for private organizations participating in country infrastructure construction, which depends on the incomes and the future cash flows of the project itself, has already become a new ways to resolve the retardation and funds shortage in country infrastructure construction. But at present, fairly do not have a special branch and corresponding laws and regulations to control BOT, neither have concrete regulations on financial management. Since BOT project usually lasts a long time, and the operate modes in build period and operate period are quite different, how to perfect the financial management, and how to guarantee the benefit of investors, have already become urgent missions. This thesis takes China Railway Erju Group Corporation (CREGC)’s BOT project as the research object, by analyzing the financial management modes of the operating projects, sums up their characteristics, and then sets up the financial management system of BOT project, with a view of the corporation’s reality. This thesis is expected to provide BOT participators practical reference, and to perfect and rich the financial management system of BOT project.Investigating in the subjects, the main content is next:First chapter is the introduction, introducing the background, the theoretical and practical significance, the domestic and foreign research condition, and the research plan and framework of this thesis in details.Second chapter analyzes the current situation of the financial management of CREGC’s BOT project, including the corporation’s general condition, the current situation and problems of the financial management, emphasizing the financing management, the operating funds administration, the budget management, the performance management, and the financial organization and personnel. (1) The primal problem in the financing management is lack of the concepts of funds’time value and risk value, having no way to carry out the effective internal financing. (2) The primal problem in the operating funds administration is having not built up a good budget management system. Every branch uses funds without a plan, of usually beyond the plan, which leads the financial branch having no way to make rational revenues and expenditures budget, and having no way to use funds effectively. The unused and short-supplied situation occurs frequently. (3) The primal problem in the budget management is the actual operation divorced from the budget, does not meet the request of whole budget management. Some financial budget is only for accomplishing the higher demand, dealing with the examination, not for being carried out. (4) The primal problem in the performance management is that current evaluation is for a parent company to evaluate its subsidiaries, not suitable for BOT project. There isn’t special evaluation for BOT project. (5) The primal problem in the financial organization and personnel includes poor ability, unsatisfied overall quality, and lack of the experience of being CPA or accounting officer. Since the personnel is short of training, it is lack of professional in the investment, the financing management, budget, and audit, which leads to grave deficiency of financial control ability.Third chapter introduces the financial management system of BOT project. The author adopts the theory of“two functions”(Wu Zhongxin, 1998), to build and perfect the financial management system of CREGC’s BOT project from two aspects of the financial resources allocation and the financial control system. (1) Financial Resources Allocation. With the goal to realizing the maximization of enterprise value through the rational financial resources allocation, it includes such concrete functions as financing and distribution. (2) Financial control system of BOT project, namely the financial control system of the project company itself, and between the project company and its parent company. The key point is the former mainly including the whole budget management, the funds management, the financial organization and personnel management, and the performance management and the audit monitoring.Fourth chapter is the assessment to the financial management system of CREGC’s BOT project. This financial management system has highlighted the financing management’s core status in the financial management system of BOT project, so it explicitly pointed out using different performance measures. Since there is a focus on the reasons of the financial management system of BOT project, we have not discussed the implementation and operation of the financial management system in details. But assessing to the financial management system periodically, to make sure of its serviceability, sufficiency and validity, to continually improve it according to the assessment and the changes in external environment, is an important link in the financial management; this is also an important problem researchers must realize.Overall, BOT is still a new project financing mode. Since our cognition of it is still not very sufficient, the government is still lack of experience to administrate it, current law background and financing environment still maintains some distance from it, and current management system still can not face up to it effectively, we ought to have a clear cognition of it. It’s very necessary to properly estimate its negative effect while sufficiently affirming its superiority. Embodied in this thesis, it means to that the financial management of BOT project should be accordant with the enterprise development, and be able to effectively operate and avoid the risk, to make the BOT becoming a new economic growth point really.