Concession Agreements in the Shipping Industry
Authors1
Abstract
1.1 Introduction
This paper synthesizes the work developed during the last year by a team of
researchers who are members of the Institute of International Economics of the
University of Valencia, joint with the Port Authorities of Valencia Port. The aim of
the cooperation was the valuation of a major expansion project for the port of
Valencia. This will consist not only on the traditional revenues-costs analysis, but it
should also include a comprehensive risk analysis and take into account the
particularities of shipping industry concession agreements.
The result is a multidiscipline work involving, among others, data time series
analysis and field research for yielding the growth rates forecasts, analysis of the
concession agreements and charges legal frame for identifying the inputs of the
revenues-costs model and properly designing the valuation tool, and software design
1 Corresponding author: Carmen Juan Martínez. E-mail address: m.carmen.juan@uv.es
Instituto de Economía Internacional
Edificio Departamental Oriental
Campus de Tarongers
Avda. de los Naranjos s/n
46021 Valencia (Spain)
García, L., Feo, M., Monfort, A., Pérez, E., Torregrosa, A
Valenciaport Foundation
Puerto de Valencia
Valencia (Spain)
In this paper we present a methodology for designing concession agreements in the shipping
industry. Such methodology allows us to make return-risk stochastic analysis of both parts
of the concession agreement, to quantify the value of the risk transfers that underlie
concessions, and finally to value those sweeteners included in agreements that require a real
options approach. We make use of standard stochastic return-risk analysis, joint with a
specifically designed numerical algorithm for the sweeteners valuation. The implementation
of the whole methodology has been done in Excel and is based on a broad empirical study of
the expansion of Valencia Po