INVESTMENT EVALUATION OF A SUBURBAN COASTAL TRANSPORT SYSTEM SAMBRACOS Evangelos Associate Professor Dept. of Maritime Studies University of Piraeus e-mail: sambra@unipi.gr
10th IFORS SPECIAL CONFERENCE Objective Investigate the viability and economic possibility of a suburban coastal shipping system in the area of Athens Estimation of the best viable solution 10th IFORS SPECIAL CONFERENCE
Development of Suburban coastal transportation system Characteristics of Athens urban center expansion of residences towards the suburbs road transport system for citizen mobility & goods transit private costs for its users high society cost, “externalities” negative secuences on the environment (pollution, noise, etc.) the cost of accidents the cost of traffic congestion, etc. 10th IFORS SPECIAL CONFERENCE
Development of Suburban coastal transportation system The establishment of a suburban coastal transport system - movement of cargo and passengers by sea between ports situated in a geographical area, that is the area of Athens - connection between Piraeus and South Athens (Moschato, Kalithea, P.Faliro, Alimos, Elliniko, Glyfada, Voula, Vouliagmeni, etc.) 10th IFORS SPECIAL CONFERENCE
10th IFORS SPECIAL CONFERENCE
Economic features of a suburban coastal shipping operation Cost of the System - investment cost, - operating cost (fixed and running cost) - the depreciation cost - the financial cost Scenarios A. one stop between the ports of origin and destination, using two vessels on pick hours B. two stops between the ports of origin and destination, using three vessels on pick hours 10th IFORS SPECIAL CONFERENCE
10th IFORS SPECIAL CONFERENCE
Investment Cost and Operating cost for the two scenarios (000drh) 10th IFORS SPECIAL CONFERENCE
Viability of the suburban coastal transport system CaseΑ: Scenario 1 (1 mid-stop), price of the ticket 700drh. Case Β: Scenario 2 (2 mid-stops), price of the ticket 700drh. Case C: Scenario 1(1 mid-stop), price of the ticket 500drh. Case D Scenario 2 (2 mid-stops), price of the ticket 500drh Revenues Case Α: 913 mil.drh. Case Β: 961 mil.drh. Case C: 828 mil.drh. Case D: 875 mil.drh. 10th IFORS SPECIAL CONFERENCE
Financial analysis of the suburban coastal transport system Financial viability of the system for its operator, the entrepreneurial cost and benefit from such an undertaking Variables: number of stops/vessels price of the ticket % of loan and own capital loan interest Indicators: NPV,IRR 10th IFORS SPECIAL CONFERENCE
Relation: % of Loan and NPV 10th IFORS SPECIAL CONFERENCE
Financial analysis of the suburban coastal transport system 10th IFORS SPECIAL CONFERENCE
Financial analysis of the suburban coastal transport system 10th IFORS SPECIAL CONFERENCE
Loan Interest and % of Loan 10th IFORS SPECIAL CONFERENCE
Sensitivity analysis for Case A 10th IFORS SPECIAL CONFERENCE
10th IFORS SPECIAL CONFERENCE Conclusions The above quantitative analysis proves the following: There is a reverse analogy between NPV and the % of Loan for the investment cost Case A shows the higher NPV (and IRR) and therefore is the most efficient financial solution The % of Loan that makes NPV=0 is higher for Case A, in every level loan interest The sencitivity analysis for Case A, shows that the higher the level of uncertainty in the total revenues (reduction in demand) the lower the % of Loan 10th IFORS SPECIAL CONFERENCE