An Appraisal of a River Cargo Transportation Project

Abstract

This paper provides evidence for the strength of the comprehensive analysis as an analytical tool to help the decision makers to improve their investment and operational strategies for river transportation projects. To do so, a River Cargo Transportation Company (RCTC) in Brazil was introduced and an integrated financial, economic, distributive and risk analysis was conducted to test the viability of the project. The analysis consists of identifying related financial and economic risk variables and performing the sensitivity analysis of these variables. The evaluation model of this project was based on a cost-benefit analysis methodology and a random calculation in which risk analysis was performed using Monte Carlo simulation. This integrated analysis provided a range of outcomes that can reduce the risk of uncertainty and give more reliable results than estimating the expected net present value or internal rate of return.

Keywords: financial analysis, economic analysis, stakeholder analysis, Monte Carlo Simulation, river cargo transportation