Abstract: A rational benchmark rate of return in publicprivate partnership(PPP) rail transit project is an urgency at present. Hence, a dynamic benchmark rate of return model of PPP rail transit project is constructed based on the operation cost and passenger flow varying characteristics brought by rail transit network effect. Firstly, the concepts of different decisionmaking timing are introduced, and the capital asset pricing model (CAPM) is improved by Vague set theory. And then, the weight of each risk factor that affects the benchmark rate of return of PPP rail transit project is assigned and the risk coefficient of CAPM is revised based on the investigation data of risk factors and the structural equation model. Finally, the model is applied to the PPP project of Changsha Rail Transit Line 6, and the applicable results indicate that the model is feasible. It is concluded that the benchmark rate of return of PPP rail transit project should be rationally selected according to different decisionmaking opportunities so as to attract the participation of social capital and protect the public interest of the project.

Key words: publicprivate partnership(PPP) rail transit project, dynamic benchmark rate of return, improved capital asset pricing model