To ensure the smooth construction and operation of water conservancy PPP projects, the principal-agent model without uncertainties and the principal-agent model with supervisory uncertainties are established by analyzing the causes and hazards of adverse selection and moral risk with regard to the characteristics of water conservancy PPP projects. The above models are solved and analyzed. Finally, three suggestions are proposed to reduce the occurrence of adverse selection and moral risk, including formulation of excitation mechanism, improvement of government's supervision efficiency and intensification of punishment.