1. INVESTMENT EVALUATION OF A SUBURBAN COASTAL TRANSPORT SYSTEM
SAMBRACOS Evangelos
Associate Professor
Dept. of Maritime Studies
University of Piraeus

2. 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

3. 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

4. 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

5. 10th IFORS SPECIAL CONFERENCE

6. 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

7. 10th IFORS SPECIAL CONFERENCE

8. Investment Cost and Operating cost for the two scenarios (000drh)
10th IFORS SPECIAL CONFERENCE

9. 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

10. 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

11. Relation: % of Loan and NPV
10th IFORS SPECIAL CONFERENCE

12. Financial analysis of the suburban coastal transport system
10th IFORS SPECIAL CONFERENCE

13. Financial analysis of the suburban coastal transport system
10th IFORS SPECIAL CONFERENCE

14. Loan Interest and % of Loan
10th IFORS SPECIAL CONFERENCE

15. Sensitivity analysis for Case A
10th IFORS SPECIAL CONFERENCE

16. 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