With a daily income of 1.5 billion, why is the highway seriously losing money?Where the revenue goes**.
The overhead is staggering.
Although the highway is earning $1.5 billion a day, there is a harsh reality behind this staggering figure: it is still in a huge loss. So where did all this big money end up spent?It turned out that this money was eaten up by various expenses and turned into a huge money black hole.
Highway construction is a large, costly project. From site selection, to road paving, to the construction of bridges and tunnels, every step is a huge investment. Especially in the case of high mountains and many rivers, the construction cost will increase exponentially. In addition, a considerable amount of money should be invested in the construction of supporting facilities such as road signs and safety facilities.
In addition to the cost of construction, the cost of road maintenance is also a considerable expense. Carry out maintenance on the road surface, such as repairing the road surface, remarking the marking, safety inspection, etc., to ensure the smooth and safe flow of the road. This project not only consumes a lot of manpower and financial resources, but also requires the use of special equipment and materials, which is expensive. At the same time, the monitoring, communication and other equipment of the highway have been upgraded and repaired to a certain extent.
The benefit of liabilities is another significant expense. Because the construction of expressways is generally financed by borrowing or issuing bonds, operators have to pay high interest rates. Especially at the beginning of the business, when the income cannot be recovered, the interest rate on the debt will become a great pressure.
In addition, in the construction and operation of the expressway, it will also have a certain impact on the surrounding ecosystem, so it is necessary to increase the protection and transformation of the surrounding ecological environment, and at the same time to compensate accordingly.
In short, roads are a very lucrative industry, but at the same time, they are also a lot of expenses. Whether it is construction costs, maintenance costs, debt interest, or environmental protection and compensation costs, it is unavoidable. Such spending constitutes a huge capital black hole that continues to eat away at highway companies' earnings.
b.Policy and Debt Effects.
In addition to direct construction and maintenance costs, policies and liabilities are also the main factors affecting road financing. ** Policy formulation and the rationality of the debt structure are directly related to the financial situation of the expressway.
In the process of construction and operation of high-grade highways in China, the state plays a pivotal role, which is not only the regulatory department, but also the decision-maker. In order to stimulate economic growth and reduce the pressure on residents, countries have adopted measures such as free rides during holidays. While such policies improve the welfare of the public, they also lead to financial losses for highways. In addition, there is also the possibility of regulating road tolls, which will have a certain impact on the finances.
In the construction and operation of many highways in China, many projects have adopted the BOT method. In the process of building highways, private companies and joint ventures often borrow money. To a certain extent, this type of borrowing meets the temporary capital needs of enterprises, but in the long run, it forms a heavier debt pressure. Large liabilities mean high interest rates, which is a heavy burden for business operators. Improper debt structure, too long debt maturity dates, and too high interest rates can put operators in financial difficulties.
In order to reduce the financial burden of business operators, subsidies can be given in a variety of ways, such as subsidies, tax reductions, etc. Such grants would alleviate the burden of indebtedness and enhance the financial sustainability of the scheme.
Conclusion. The cost and loss of expressways is not just a simple "digital game", it involves many factors such as policy, economy, and management. In order to study the financial situation of expressways, it is necessary to conduct in-depth excavation and comprehensive research. Through the above analysis, we can better understand the root cause of the company's financing difficulties, so as to better point out the direction for the company's future development.