Analyzing Influencing Factors of Financing Decision for Urban Rail Transit Projects Using DEMATEL Approach

Financing behavior, based on the financing decision made by the owner of urban rail transit projects, will directly affect the capital cost of its operation and the construction schedule of the project. This paper intended to combine financing demand and financing options with the project construction schedule, quality and investment management, and based on DEMATEL methodology, to identify and sort the factors that constraining the financing behavior and financing structure in rail transit financing and then systematically analyze them. On this basis, the paper kept “Fund Timely Raised and Cost Lowest” as the objective and proposed an optimum framework in response to the financing structure under multi factors.


INTRODUCTION
Urban Rail Transportation, as a modern public transportation infrastructure facility, is deeply affecting the progress of the whole social development.It has the advantages of safe, fast, high transportation volume, low pollution and high efficiency.Urban transit construction helps the development of public transportation facilities and will play an irreplaceable role in the comprehensive development of the whole society.In China, the urban rail transportation reached its high speed development period in the eleventh 'Five Year Economic Development Plan' ('Five Year Plan').And in the twelfth 'Five Year Plan' period, it is getting more as the focus of infrastructural investment.With further speeding of urbanization in China, rail transit will take about 50~60% of daily resident trips in modern city transportation system.The development of urban rail transportation will become a key point in solving urban transportation congestion problems.But the urban rail construction is demanding huge fund.Since 2004, the investment for urban rail construction in Guangzhou has been increasing year by year.And up to end of 2014, total sum for this investment has reached RMB 182.112 billion (USD1 = RMB6.3@ exchange rate of April 2015) as shown in Table 1.Of this, Guangzhou municipal (district) government investment is RMB 74.922 billion, about 41.14% of the total sum; the bank loan is RMB 65.081 billion, about 35.74% of the total sum.The two takes the highest percentage in the total investment as shown in Fig. (1).For the rest, the fund comes from (super) short term securities loans, medium term notes, corporate bonds, financing leases, bank loans, corporate loans, etc. *Address correspondence to this author at the School of Civil and Transportation, South China University of Technology, Guangzhou, 510641, Guangdong, China; E-mail: yuanliangliang1978@163.com Now, although the government has increased its fund and policy support to urban rail transportation project, the money gap for this investment is still quite big in term of normally negative operation of urban rail transportation project.Exploring the factors that affecting urban rail project financing decision and how based on the restraining factors to optimize the financing structure are the key issues to be put under consideration in pushing the healthy development of urban rail construction.But opinions can be differed.More lecturers from the western world think that local financial ecological environment has key influence in financing model selection.For example, unnecessary legal requirements, complicated and non-transparent administrative procedure, etc. are often increasing the cost to the investors [1].World Bank Analysis Report showed that the industrialized countries' economy development cycle and the developing countries' credit rating are the important factors in infrastructure financing model selection [2].Some scholars from China suggested that government investment in the early stage of the project, social framework participation and degree of its involvement, impact of the project to the public, etc. are the key factors in urban transit financing decision [3].Some scholars also suggested to put government environment and market environment under consideration and propose to introduce the PPP (Public-Private Partnership) model into urban rail financing [4][5][6][7].Above mentioned studies did not systematically put all affecting factors in urban rail financing under full consideration.Therefore, this paper intends to systematically analyze the internal and external factors in urban rail financing and the inter-relationship between the factors, and by way of DEMATEL methodology to quantitatively disclose the comprehensive influence of these factors and then find the key factor.The result of this study provides a scientific decision-making guideline for urban rail transportation financing.

Main Research Ideas
This paper synthetically uses literature review, questionnaire method and DEMATEL method.The research is divided into three steps as shown in Fig. (2).

Creation of Factor System in Financing Decision
Based on the operation condition of urban rail transportation project in China and abroad, its investment can be divided into three models: "Investment and Operation both by Government", "Investment by Government and Operation by Market" and "Investment by Multi-parties and Operation by Market".The financing action performed by urban rail project construction parties will directly affect both the capital cost of business operation and the project execution schedule as well.For years, the scholars all over the world tried to find the most optimized financing model.But due to the constraints by some objective factors, the actual financing decision always differs with the optimized financing decision in theory.Early theory review showed that, in urban rail project financing in China, the factors are linked to the urban rail project itself, the construction parties, the government and the government policy.This paper will analyze the internal and external main factors in urban rail project financing decision and split the factors into 5 categories (Project Characteristic, Project Management, Government Support, Government Policy and Economic) and 15 Sub-categories.Then, based on scientific and full-coverage basis, we find that the key factors in urban rail project financing decision-making as shown in Table 2.

DEMATEL (Decision Making Trial and Evaluation
Laboratory) method, literally translated as the decisionmaking trial and evaluation laboratory, is the methodology proposed by the American Institute named Bottelle in 1971.And the main idea is based on the Questionnaire responses of a number of experts in the field about interaction between the various factors by determinant calculus, and to analyze the logical and direct influencing relationship between the factors, to build a direct affecting matrix and calculate the degree of the mutual influence, determining whether the inter-relationship exist or its strength.Rounding influence of small targets, it ultimately aims to simplify the system structure.Basic steps of building a model to find the key factors by way of DEMATEL methodology are as follows [8][9][10]: (1) To simplify the analysis, the influencing factors are denoted as F1 F2… F15.To quantify the effects of various factors, a calculation matrix, X = xij ( ) 15 15 , is built.
xij is assigned the value of zero when there is no effect, 1 when there is but only moderate effect, 2 when there is effect, and 3 when there is considerable effect.Based on the reply to the Q&A form and find the factors and its impact to other factors.Then build a direct affecting matrix X among each factors detailed as shown in Table 3.
(2) After standardize processing to the direct influencing factors, X , building a standardized matrix G ,then using the MATLAB software to calculate the affecting factor matrix Z=G(I-G) -1 detailed as shown in Table 4.
(3) Based on the composite affecting matrix, comput- r i + c j and r i c j , using DEMATEL to find the Center and Reference of each factor as shown in Table 5.

DEMATEL Calculation Result Analysis
Analysis results, in terms of DEMATEL processing results that are processed by the above stated method and by the analysis model for the influence factors of financing decision for urban rail transit project, are as follows in accordance with the model stated above: (1) Reason factors are 7 and results factors are 8 according to the occurrence reason index for factors.The reason factors, influencing the financing decision for urban rail transit project, shall be in accordance with the following sequence by the importance degree: F12 Laws and regulations , F1 Industrial characteristics , F11 Government policy support , F10 Government finance input ,F9 Investment management , F6 Schedule management , F2 Project scale.These factors, directly influencing the financing decision, served as the active factors that significantly influence other factors, More funds needed in peak period.Fund timely needed will decide its financing option.

Enterprise interviews
Project Characteristic F5 Project Risk Complexities of the project, project easy or difficult will directly affect the investment money and indirectly affect the financing scale. [11]

F6 Progress Management
Project ahead of behind schedule will affect the project execution schedule and hence affect the payment term and financing requirement.Project period will affect its development cost.
Early project completion and quality assured will reduce the cost expenses and avoid the cost increase due to inflation. [12-13]

F7 Safety Management
Proposal and design change, due to geology reason, geology risk, ambient environment, and project construction safety consideration reasons.It will increase extra work beyond the contract and will affect financing volume.Meanwhile will also need funds for safety and accident precaution.

Enterprise interviews
Project Management Factor F8 Quality Assurance Quality will have direct or in-direct links with project cost and schedule.Will also affect financing scale and its timing.

Enterprise interviews F9 Investment Management
Construction period Investment management (includes design budget, tender budget, tender price management, signing of contract, contract management, change of contract, budget management, etc.) will affect project construction money amount change.Contract payment variation and final account settlement will also affect financial timing and amount. [14]

F10 Government Financial Support
Government has enough fund or not will affect business financing options.[15][16][17] Government Support

F11 Government policy Support
Government preferential policy will affect the introduction of market capital and will affect financing options. [18]

F12 Government Laws and Regulations
Government law and regulation will protect the interest of the investment from market investor.It will benefit the introduction of market capital and will create a legal basis for realization of multi financing option.
[19] Government Policy F13 Government Income Tax Policy Preferential financial system and tax income system by the government, for example Guarantor by Government, financial subsidy, tax rebate, municipal bond, etc., will benefit for the expending of the project financing.

Enterprise interviews F14 Financial Mechanism
Good financing environment can help to increase financing market scale, expend financing channel and improve financing efficiency.[20][21][22] Economic Factor

F15 Interest Rate
When interest rate increasing is expected, project will prefer long-term financing option.When interest decreasing, project will prefer short-term financing option.
Enterprise interviews shall be strengthened; the results factors shall be in accordance with the following sequence by the importance degree: F5 Construction risk, F3 Project construction cycle, F14 Financial mechanism, F4 Project construction phase, F13 Tax policy, F7 Safety management, F15 Interest rate level, F8 Quality management .These factors affected by other factors, further influence financing decision, which is the most important factor affected by other factors.
(2) Centrality refers to the importance degree of the factor in the system, the factors shall be in accordance with the following sequence by the centrality index of the factor: F10 Government finance input, F11 Government policy support, F9 Investment management, F1 Industrial characteristics, F6 Schedule management, F3 Project construction cycle, F2 Project scale, etc. From the point of view of centrality sequence of comprehensive influence factors and occurrence

Project Financing Structure Analysis
(1) On above mentioned analysis to the factors, it showed that the government will plays a key role in constraining and proposing urban rail transportation financing.For rail transportation construction, local government should not only guarantee the investment but also set up supporting policy to urban rail transportation companies.For example, to allow these companies to make use of the profit made from the land development along the metro line, for the metro construction fund; And to allow these companies make use of government credit as budget cash flow for the basis of rail transportation project financing.
(2) The investment volume of urban rail transportation project is high.The technology for its implementation is complicated.The construction period is long and the liquidity of the project is low.Compared with other commercial projects, it financing option is limited.So it should maximize favorable factors and minimize unfavorable factors and make full use of all kinds of new financing options to expand its financing channel.For example, the companies can use financing lease and loan for latest metro construction equipment and facility.Using this way, it will reach both the target financing objective and avoid construction risk as well.
(3) In project management, the rail transportation construction units should actively coordinate with other con-struction parties to overcome the difficulties during project execution period and meet the target schedule.If any dispute, in removal of land, pipe and tube redeployment, geologic condition change, etc., shall not make it a delay to the project schedule.Shall promptly adjust the project execution plan and change the fund requirement if needed.The project owners shall enhance its investment management, follow strictly the earlier budget plan and make it a target objective.Shall perform investment plan management, enhance tender and contract management, tighten the control to engineering change management system, improve the contract change and performance rating system, set up the contract and information account management system, timely control the investment, the cost change and financing requirement change.Based on above mentioned, to set up a dynamic financing system fully meet urban rail transportation requirements.

CONCLUSION
Using DEMATEL approach, the paper analyze influencing factors of financing decision for Urban Rail Transit Projects in-depth, obtaining results that key influence factors in financing system of urban rail transit project are Government finance input, Government policy support, Investment management, Industrial characteristics and Schedule management.As Government finance input, Government policy have the greatest impact, Rail transportation financing decision-making shall mainly be controlled by government authorities to search for multi financing channels and financing combination.Secondly, financing decisions for urban rail transit project are mainly affected by the factors including Investment management, Industrial characteristics and Schedule management.And meanwhile urban rail financing is always in a dynamic changing state.Suggest the investors to setup a dynamic financing structure according to these factors, to reach the balancing multi targets among financing cost and financially security, flexibility, enterprise controllability, etc.