Concession Agreements in the Shipping Industry.
Operating Flexibility. New Developments in Real Options with Applications in an International Context". Oxford University Press. Juan, Carmen; Olmos, Fernando; Casasús, Trini; Pérez, Juan Carlos; García, Leandro; Feo, María; Monfort, Arturo; Pérez, Eva y Torregrosa, Antonio
(2005)
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 specifically designed numerical algorithms 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 Port.