Article
citation information:
Mindur, L., Szyszka, G. Methodology
of assessment and selection of economic factors conditioning the operation of
integrated logistics centres. Scientific
Journal of Silesian University of Technology. Series Transport. 2018, 100, 127-141. ISSN: 0209-3324. DOI: https://doi.org/10.20858/sjsutst.2018.100.11.
Leszek MINDUR[1],
Grzegorz SZYSZKA[2]
METHODOLOGY
OF ASSESSMENT AND SELECTION OF ECONOMIC FACTORS CONDITIONING THE OPERATION OF
INTEGRATED LOGISTICS CENTRES
Summary. The article addresses
the overall body of problems pertaining to economic factors conditioning the
construction and operation of integrated logistics centres (ILCs). These
problems are among the most fundamental decision-making dilemmas related to
such investments. The authors of the article have discussed the methodology of
assessment and selection of economic factors for the cost-effective
construction and operation of ILCs by taking the perspective of entities
involved in the construction and functioning of these centres into
consideration. Model ILCs are understood as facilities of a specific spatial
and functional nature, along with all the infrastructure and organization,
where logistics services are rendered in the scope of receipt, storage,
distribution and release of goods, supported by auxiliary services provided by
businesses independent of forwarders or recipients [3]. From the
perspective assumed in the article, logistics centres are considered as
projects implemented by both privately owned and public entities, which are
open to participation with different economic entities representing the ILC
sector, as well as other industries performing their logistics operations on
the centre’s premises and using its infrastructure. The article draws
from the authors’ own experience, research and insights.
Keywords: logistics centres;
investments; development; financing; economic factors.
1. INTRODUCTION
The problem of identifying economic
factors for the construction and operation of integrated logistics centres
(ILCs) is one of the most fundamental decision-making dilemmas related to
implementation of such investments. The authors of this article have attempted
to discuss the methodology of assessment and selection of the economic factors
underlying the efficient construction and operation of ILCs by taking the
perspective of businesses directly and indirectly involved in the development
and functioning of ILCs into consideration.
The main problems involved in
deciding on the development of an ILC should be solved while planning the
construction and operation of the ILC, as per the following five-point
algorithm proposed in this paper.
1. Demand analysis,
comprising the assessment of both current and future demand for logistics
services, size of the logistics market, consumption level, labour market and
economic growth.
2. Location analysis,
comprising problems in the structure of individual transport branches,
availability of transport infrastructure and investment sites, attitude of
local authorities, and assessment of potential conflicts and threats.
3. Feasibility analysis,
comprising economic and financial analysis, risk analysis, environmental risk
analysis, and assessment of social and economic effects.
4. Decision-making
analysis, concerning the choice of an implementation variant, organization
variant, functional variant, ownership and capital structure, as well as growth
strategy.
5. General implementation
planning, comprising the determination of final ILC size, project schedule,
investment financing instruments and ways to ensure that tenants occupy the
investment premises.
In order to analyse these aspects
for the sake of evaluating alternative solutions, one must consider diverse
aspects, including economic, technical, social, legal and environmental ones,
and, at the same time, the frequently and inherently contradictory interests of
different parties. The most common interest groups involved in development of
ILCs are: investors, capital owners, ILC management, ILC tenants and their
clients, employees, public authorities on different levels and local
communities. The expectations and needs of all or some of the aforementioned
parties must be satisfied to a larger or smaller extent. Faced with such
issues, one will hardly ever resort to the classical and obsolete understanding
of optimality, since it is virtually impossible to produce optimum outcomes
(solutions) perceived as the best ones by those representing all points of
view. What seems to be far more significant under such circumstances is the
concept of a compromise solution, which also takes the interests of different
parties, as well as the analysis of potential trade-offs, into consideration.
2. FACTORS INVOLVED IN INTEGRATED
LOGISTICS CENTRE CONSTRUCTION AND OPERATION
In the authors’
opinion, the factors conditioning the construction and operation of ILCs
include those that determine the effectiveness of ILCs’ development and
functioning, such as the following:
· determination of the ILC
size, depending on the demand for the services to be rendered by the ILC and
its nature and assumed features, taking its future growth and the availability
of land into account [4]
· determination of the
ILC’s range of functions
· choice of location for
the ILC, depending on the demand for the services to be rendered by the ILC being
designed, the level of infrastructural connections with the surroundings,
accessibility of utilities etc.
· land acquisition
procedure (purchase, lease, consolidation)
· choice of the ILC
construction financing structure, which particularly applies to cases when such
potential funding sources as private and public funds are to be included
· planning of individual
investment stages, depending on the assumed general concept of the ILC growth
· choice of the policy to
be pursued with regard to prices of logistics and auxiliary services to be
rendered by the ILC, as well as lease prices for the ILC’s buildings and
land
The above description of
the most significant factors considered in the construction of an ILC clearly
shows that they depend on a number of conditions and that they matter for
different entities directly or indirectly interested in meeting these
conditions. Moreover, the fact that ILC investment planning requires numerous
decisions to be made at the same time, and that each of them may lead to more than
two solutions, means that the number of alternative variants for the
construction and operation of the given ILC is relatively high. Such
characterization of the related problems implies how complex it is to choose
the most adequate solutions.
Businesses whose
economic and financial standing is most highly dependent on the development and
subsequent functioning of the ILC include the following:
· Investors - Direct
investor, i.e., the enterprise owning the ILC, accumulates capital and develops
the ILC infrastructure. Indirect investors - direct investor’s
shareholders (manufacturers, distributors, developers, financial institutions,
local government bodies, individuals etc.).
· Service purchasers - ILC
tenants, i.e., businesses making use of the ILC infrastructure upon payment,
which organize and perform logistics processes as part of the ILC’s
operations (logistics operators, production companies, distributors, service
providers).
· Recipients of
ILC’s services - businesses using the logistics services delivered
directly by the ILC or by the ILC tenants upon payment.
· Public institutions -
local government bodies highly interested in creating new jobs and stimulating
the region’s economic growth.
The aforementioned
entities, representing major participants in the ILC construction venture,
exert the largest influence on the prospects of financial efficiency and
cost-effectiveness of the ILC development project. For the sake of assessing
the economic and financial factors of the ILC construction project, the model shown
in Figure 1 is proposed, as it enables the assessment of the foregoing factors
from the perspective of the satisfaction of the ILC tenants’ needs
related to minimizing the costs of the services being purchased, as well as the
investor’s needs oriented towards profit maximization.
* PUC - pallet unit of cargo
Fig. 1. Model for the assessment of economic ILC construction factors with regard
to investor and user needs
Source: author‘s own materials
According
to the model, the first stage consists of establishing total (constant and
variable) unit costs of logistics operations for the potential purchaser of the
services rendered by the ILC/tenant, which affect the total unit cost of the
former’s product or service. Establishing the level of these costs, based
on rational and objective economic premises, and comparing them with prices of
the services rendered by the ILC will make it possible to assess whether it is
substantial to use services offered by the ILC as an alternative to the
construction and/or use of one’s own logistics resources.
2.1. Identifying user benefits resulting from the purchase of the integrated
logistics centre’s services
The first stage of this
methodology assumes that unit costs of logistics operations (warehouse
management operations have been considered for the purposes of this
elaboration) for potential ILC tenants will depend on the following:
· production levels and
consequential daily volumes of the warehouse flow of cargo units
· scenarios of
construction and operation of one’s own warehouse (stage-wise nature of
investment)
· storage technologies in
use
· weighted average cost of
capital acquisition
· pre-assumed indices of
effectiveness of construction and functioning of one’s own warehouse
Having calculated the
cost indices of logistics operations for potential purchasers of the
ILC’s services as above, one can establish price levels for the services
to be rendered by the ILC, making sure that the ILC tenants’ expectations
will be satisfied, thus creating demand for these services (price
level-relative demand curves).
2.2. Determining investment effectiveness for different integrated
logistics centre construction variants
With reference to the
demand thus established, economic and financial effectiveness prospects of
construction and operation are identified for an ILC investor with regard to
different:
· investment capital
structures
· demand distributions
depending on the price levels of the ILC’s services
· ILC construction
scenarios (stage-wise nature of investment)
2.3. Selecting optimum variants based on
multicriteria decision-making analysis
Stage three consists of
ranking the best variants of the ILC construction and operation based on
multicriteria decision-making analysis, bearing in mind the perspectives of
major decision makers and based on the criteria assumed for the assessment of
individual investment variants.
3. GOALS UNDERPINNING THE
DEVELOPMENT OF A MODEL INTEGRATED LOGISTICS CENTRE AND FACTORS OF ITS
CONSTRUCTION AND OPERATION
The most fundamental
socio-economic goals underpinning the construction of a model ILC are as
follows:
·
functional enhancement of the supply chain (logistics networks)
·
shifting demand from road transport towards rail transport
·
increasing interoperability of transport networks
·
optimized use of national and international transport networks
·
stimulation of local and national economic activity by rendering
services that support production, distribution and logistics
Pursuing the above goals
exerts a direct impact on the scope of tasks and functions that ILCs should
perform, the most important of which are:
·
organization and coordination of cargo transport services
·
matching different modes of transport together and organization of their
co-functioning
·
sharing infrastructure and creating conditions for the activity of
logistics operators
·
matching supply of and demand for logistics services
·
creating conditions that favour increasing value added in logistics
services
·
creating a milieu for fair competition and free market price setting
The opportunities for
the construction, functioning and growth of ILCs also depend on socio-economic
conditions, the most important of which are connected with the key parties
involved in the project, including public investors (authorities and local
organizations) and public investors, as well as with attracting ILC clients
(tenants) in a sufficient number.
4. CHARACTERISTICS OF
THE MODEL INTEGRATED LOGISTICS CENTRE
The model ILC assumed
for the purposes of further analysis was characterized by the following
features:
· regional and
international character of the ILC’s operations
· regional service
coverage within the radius of 150 km
· international service
coverage - 60-h customer service span
· two modes of transport
combined: road and rail transport
· road and rail container
terminal functioning along with trans-shipment equipment
· convenient access to
road and rail infrastructure ensuring the efficient handling of combined
transport
· land utilities (internal
roads, utilities) enabling business activity for entities operating on the
ILC’s premises
· ILC’s facilities:
warehouses, storage yards, office buildings, parking areas for heavy goods
vehicles, petrol station, heavy vehicle service garage, hotel, electronic
information and transaction platform
For purposes of the
research experiment, it was assumed that the following main location and siting
requirements affecting the operating efficiency of the logistics centre would
be satisfied for the model ILC:
· high economic potential
of the region and the related high demand for logistics services within the
ILC’s reach
· close proximity of
highly developed road and rail transport network
· availability of
integrated investment areas of sufficient sizes
· access to utilities
· availability of highly
qualified workforce with relatively low labour cost
· good transport
connections with regional business centres
The model ILC was
assumed to be developed in stages with the dense spatial arrangement of
technological and organizational features, with the following five domains of
activity at the core:
· road and rail container
terminal featuring trans-shipment machines, capable of servicing intermodal
shipments
· buildings and other
built features for lease: warehouses, storage yards, parking areas tailored to
specific tenants’ needs and requirements
· land for lease
· integrated information
and transaction system
· diverse services
rendered by the ILC tenants, including: logistics services delivered by
businesses representing the ILC sector, and auxiliary services, such as the
servicing of heavy goods vehicles, hospitality and customs clearance
Having analysed examples
of the spatial development of ILCs built in Western European countries and
drawing on their own experience, the authors have devised a model structure of
ILC land development. The model proposed applies to logistics centres with an
area of about 100 ha [2]. One of the assumptions behind this solution is that
70% of the area intended for the given ILC land development option is to be
offered to external investors willing to invest in the development of their
in-house storage facilities and office buildings.
Fig. 2. Diagram of the functional and organizational
features of the model ILC
The range of services provided by the model ILC will comprise those to be
delivered by the ILC managing company (operator) in relation to rendering the
infrastructure available, assuming their high quality and competitive prices,
as well as services offered by businesses, i.e., the ILC tenants, comprising
typical logistics services and prerequisite auxiliary services.
The basic services to be rendered directly by the ILC include the
following:
·
cargo trans-shipment at the container terminal
·
rendering of warehouse space and storage yard area
available upon payment
·
lease of land for logistics investments
The services to be rendered by the ILC tenants as a means to support
logistics processes include the following:
·
basic logistics services
·
transport services
·
storage services
·
freight forwarding
·
order and stock management
·
packing
·
picking and dispatching
Table 1
Indicator-based
structure of the model ILC land development
|
Land development
option |
Area [ha] (external
investors) |
Share [%] |
|
Total area |
100 |
100 |
|
Storage buildings |
12.5 (70% - 8.75) |
12.5 |
|
Auxiliary facilities of storage buildings (vehicle circulation and
parking areas) |
6 (70% - 4.2) |
6 |
|
Office buildings |
0.6 (70% - 0.4) |
0,6 |
|
Pallet and crate storage yards |
4.3 |
4.3 |
|
Container terminal |
11.4 |
11.4 |
|
Parking areas |
2.7 |
2.7 |
|
Access roads, vehicle circulation areas |
27 |
27 |
|
Accessory buildings (petrol station, washing station, service garages,
processing facilities etc.) |
12 (100% - 12) |
12 |
|
Green areas |
23.5 |
23.5 |
|
Utilities |
Length [rm] |
Network density [rm/m2 thous.] |
|
Storm water drainage |
22,000 |
22 |
|
Storm sewer |
1,600 |
|
|
Electrical network |
8,300 |
8.3 |
|
Water supply and sewage disposal system |
7,800 |
7.8 |
|
Main sewer |
1,600 |
|
|
Gas network |
2,600 |
|
Source: author‘s own materials
Auxiliary services:
·
insurance for trade in goods
·
customs clearance
·
banking services
·
technical vehicle servicing
·
container rental, storage and repair
·
sales of fuels and automotive accessories
·
hotel and catering services
·
parking services
·
cargo surveying and inspection
·
information services and IT support
·
marketing and advertising services
·
legal counselling
· accounting and financial services
5. PRICING POLICY ASSUMED FOR THE
MODEL INTEGRATED LOGISTICS CENTRE
The pricing policy assumed for the model ILC should consider the need for
profit maximization for the sake of a quick return on investment, which
theoretically boils down to reaching a demand and supply balance with prices
set at a level ensuring the full utilization of the ILC’s resources.
In accordance with the classical price and demand principle, it has been
assumed that the level of ILC utilization will depend on the economic
conditions of the tenants’ logistics operations managed at the ILC, with
special emphasis on the level of prices offered for the services rendered. The
aforementioned implies that the problem involved in analysing different options
of economically sound levels of calculated unit prices, which would ensure, on
the one hand, realizing financial indicators satisfactory to investors and, on
the other hand, a high level of benefits attained by the ILC tenants, becomes the
key element in the analysis of factors, which condition the effective
functioning of the model ILC.
In order to solve this problem, one must ensure the base calculated unit
prices for typical services rendered by the ILC, ensuring that the ILC’s
services are favourable to those that buy them, which means that they are
equivalent to comparable adequate unit costs for the construction and operation
of their own warehousing infrastructure.
To this extent, in order to determine the impact of the adopted pricing
policy on investment effectiveness, specific curves of demand for the
ILC’s services have been assumed, making the degree of utilization of the
ILC’s resources conditional upon the level of prices defined against the
base calculated prices. Three pricing options have been taken into
consideration with regard to provision of the ILC’s services.
·
OPTION 1 - Prices of the ILC’s services
set at 20% less than the base calculated prices. This option, providing high
benefits to service purchasers, should ultimately ensure full (90% -
warehouses, 85% - container terminal) utilization of the ILC’s resources.
·
OPTION 2 - Prices of the ILC’s services
set at 10% less than the base calculated prices. This option should ensure
moderate (80% - warehouses, 77% - container terminal) utilization of the
ILC’s resources.
·
OPTION 3 - Prices of the ILC’s services
set at a level equal to the base calculated prices. This option assumes that
potential purchasers will make use of the ILC’s services for non-economic
reasons, for instance, good connections with the transport network or access to
a wide range of logistics services. It is further assumed that this option
should ultimately ensure minimum (70% - warehouses and container terminal)
utilization of the ILC’s resources.
With regard to the ILC’s pricing policy thus defined, it is
necessary to define the base calculated prices that have been calculated with
reference to the original methodology for warehousing services, while, for
other services (terminal handling, lease of land), they have been calculated
based on market surveys and conducted using data available on the Internet.
6. INTEGRATED LOGISTICS CENTRE AREA
DEVELOPMENT PLAN
The model ILC area development plan, as depicted in Figure 3, has been
prepared with reference to the pre-assumed land development structure, the
spatial development analysis of European logistics centres and the
authors’ own experience. The layout plan defines locations of enclosed
structures and surface facilities covered by a two-stage ILC development
variant, as well as the infrastructure of access roads. The site development
plan covers a parcel that is 600 m in width and from 1,400 to 1,700 m in
length, equating to an overall area of about 100 ha.
The plan has been drafted by taking the following technological and
economic assumptions into consideration:
·
enabling provision of the assumed basic and
auxiliary services
·
optimization of investment costs
·
effective utilization of the entire investment
area as per the projected demand for the ILC’s services
·
ensuring access to road and rail
infrastructure in response to the ILC’s needs
·
construction of infrastructure and enclosed
structures as per the investment schedule assumed to be implemented in stages
·
modularity of building development, enabling
the flexible organization of functions and entities
·
purchasing all the land in the first
investment stage in order to avoid any further actions of speculative nature
Fig. 3. Model ILC land development plan
Source: author‘s own materials
Based on the land development
plan, in subsequent stages of the investment, one can produce detailed
technical and technological designs as well as building plans and
specifications for the ILC infrastructure, which, however, have not been
required for the purposes of this study.
Parameters of all
buildings and facilities to be sited on the ILC’s premises are collated
in Table 2, broken down into successive years of operation, from the first to
the 15th year. The values provided therein are based on the target performance
of individual facilities in handling cargo streams.
Table 2
Structure of the ICL area
development
|
Warehouses |
1.1 |
1.2 |
1.3 |
1.4 |
1.5 |
1.6 |
1.7 |
1.8 |
1.9 |
1.10 |
1.11 |
1.12 |
1.13 |
1.14 |
1.15 |
1.16 |
1.17 |
Total |
|
Area [m2] |
6,000 |
6,000 |
8,500 |
8,500 |
6,000 |
6,000 |
11,250 |
6,000 |
6,000 |
11,250 |
6,000 |
6,000 |
8,500 |
8,500 |
8,500 |
6,000 |
6,000 |
125,000 |
|
Capacity [palettes] |
7,228 |
7,228 |
10,240 |
10,240 |
7,228 |
7,228 |
13,554 |
7,228 |
7,228 |
13,554 |
7,228 |
7,228 |
10,240 |
10,240 |
10,240 |
7,228 |
7,228 |
150,589 |
|
Daily deliveries [palettes] |
289 |
289 |
409 |
409 |
289 |
289 |
542 |
289 |
289 |
542 |
289 |
289 |
409 |
409 |
409 |
289 |
289 |
6,019 |
|
Daily dispatches [palettes] |
289 |
289 |
409 |
409 |
289 |
289 |
542 |
289 |
289 |
542 |
289 |
289 |
409 |
409 |
409 |
289 |
289 |
6,019 |
|
Container terminal |
2.1 |
2.2 |
2.3 |
2.4 |
Total |
|
Total area [m2] |
28,500 |
28,500 |
28,500 |
28,500 |
11,4000 |
|
Storage area |
4,250 |
4,250 |
4,250 |
4,250 |
17,000 |
|
Capacity [TEU] |
648 |
648 |
648 |
648 |
2,592 |
|
Daily deliveries + dispatches |
123 |
123 |
123 |
123 |
492 |
|
Storage yard |
3.1 |
3.2 |
3.3 |
3.4 |
3.5 |
3.6 |
Total |
|
|
Area [no.] |
7,200 |
7,200 |
7,200 |
7,200 |
7,200 |
7,200 |
43,200 |
|
|
Capacity [palettes] |
4,800 |
4,800 |
4,800 |
4,800 |
4,800 |
4,800 |
28,800 |
|
|
Palettes delivered per day |
160 |
160 |
160 |
160 |
160 |
160 |
960 |
|
|
Palettes dispatched per day |
160 |
160 |
160 |
160 |
160 |
160 |
960 |
|
|
|
||||||||
|
Parking area |
4.1 |
4.2 |
Total |
|
||||
|
Area |
7,000 |
20,000 |
27,000 |
|
||||
|
No. of parking bays |
84 |
210 |
294 |
|
||||
|
Office buildings |
5.1 |
5.2 |
5.3 |
Total |
|
Area |
1,600 |
1,600 |
3,200 |
6,400 |
|
Investment land |
6.1 |
6.2 |
6.3 |
6.4 |
6.5 |
6.6 |
6.7 |
6.8 |
6.9 |
6.10 |
6.11 |
Total |
|
Area |
10,000 |
10,000 |
20,000 |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
120,000 |
|
Green areas |
253,000 |
|
Roads and vehicle circulation areas |
330,000 |
|
Logistics centre’s surface area |
1,010,215 |
Source: author‘s own materials
7. INVESTMENT SCHEDULE
The schedule assumed for
the model ILC construction investment is based on two fundamental premises, the
first being an intent to start operation of a part of the ILC as soon as
possible, and secondly, that consecutively commissioned ILC components are
built in a sequence, which corresponds to the needs of future tenants. The
former premise will be fulfilled by completing the investment in stages, while
the latter will be fulfilled by rendering the services that the ILC’s
customers expect the most. In accordance with the results of the survey
conducted among potential recipients of the ILC’s services, these include
the following:
· freight forwarding and
transport services (performed by ILC tenants)
· warehousing and storage
in yards
· combined transport
handling (road and rail trans-shipment terminal)
· parking services
· hotel and catering
services
· customs clearance
· technical servicing of
vehicles
The proposed modular
nature of the investment (see the ILC land development plan) and the investment
schedule, which assumes that individual modules will be completed in stages,
have a positive influence on limiting financial risk and increase the capacity
to win clients and partners for the project.
The schedule defined for
the model ILC construction investment has been prepared with regard to three
options of stage-wise construction. Such an assumption has been made by
considering the general experience related to the construction of similar
logistics centres in EU countries, as well as the need to assess the impact of
the stage-wise ILC construction on the investment effectiveness. Consequently,
it has been assumed that the ILC construction cost-effectiveness is to be
assessed from the perspective of the stage-wise character of the project, as
well as the choice of the best of the following options:
· Option A - project
completed in two stages
· Option B - project
completed in three stages
· Option C - project
completed in four stages
The first stage of
construction works is intended for the completion of the most important and
capital-intensive ILC components required to attain the target size of the
logistics centre, including the construction works to be performed by local
authorities and the PKP (Polish National Railways):
· providing utilities on
the ILC premises
· extending access roads
and tracks to the ILC premises
· completion of individual
ILC components by investors, as defined under the investment stages, including:
container terminal, enclosed warehouses and storage yards, internal roads and
vehicle circulation areas, separated customs clearance zone, technical backup
facilities of the vehicle service garage, and office buildings
The scope of investment
to be completed by investors in the first stage of the ILC construction will
comprise the following:
· purchase of all land
parcels planned for the investment - 100 ha
· development of internal
utilities for purposes of the operations to be conducted on the premises subject
to the given investment stage, including: access roads and vehicle circulation
areas, rail docks and track, parking area for heavy goods vehicles, water
supply and sewage disposal system, power and gas supply network, telecoms and
IT network.
The construction of the
enclosed building infrastructure is divided into three main parts:
· warehouses intended for
area lease
· unroofed goods storage
yards
· office buildings
intended for logistics operators and providers of banking and postal services
etc.
· construction of the
container terminal, including a container trans-shipment and storage yard
Besides the
aforementioned investments, part of the ILC land will be available for lease
and intended for the construction of buildings and facilities to be financed by
external investors not directly related to the ILC, including:
· storage facilities
· petrol station for heavy
goods vehicles and passenger vehicles
· service garage for heavy
goods vehicles
· hotel
The entire ILC
construction in stages has been planned for completion within 12 years, where
the actual construction works will proceed between the second and 12th years of
the investment, while the first year is to be consumed with design works, land
purchase and preparations before the commencement of the actual construction
works.
The land development
plan assumes that about 25% of the total ILC area will be rendered available to
external investors for the purposes of their own projects. The fact that 49% of
all the land has been intended for non-production areas (greens, roads, vehicle
circulation) implies that half of the total production area will be used for
facilities financed by external investors.
It should be noted that
the value of the land will increase considerably once it has been developed to
ensure access to utilities and connected with transport infrastructure
(container terminal). As time passes and interest in the project grows among
further investors, one may expect the value to rise even higher.
The schedule of land
preparation by the ILC for leasing to external investors assumes that all works
required to complete the respective stage of the ILC construction will be
completed within the first year of the given stage.
8. CONCLUSIONS
As a result of the
research experiment conducted by applying the methodology developed for the
sake of assessing the economic factors underlying the construction of an ILC,
the following conclusions have been drawn:
· Businesses that generate
the low-volume flow of cargo units incur high unit costs of warehousing
operations, which should incline them to use the ILC’s services.
· None of the investment
variants taken into consideration with regard to the ILC construction
guarantees a satisfactory return on investment in relation to the ILC
construction within a 15-year time span, the evidence of which can be found in
the negative NPV indices (NPV for total capital).
· Investing in the ILC
seems profitable if one considers the cash flows connected with the project
financing, as evidenced by additional NPV indices for equity, as well as
residual values of investment.
· The factor of decisive
influence on the cost-effectiveness of the ILC construction and operation is
the structure of investment capital. The impact of service prices, as well as
the stage-wise nature of the ILC construction project, is of secondary
importance.
· It has been established
that a compromise solution, which would satisfy entities representing both the
public and the private sectors, whose preferences are essentially disparate,
can indeed be found.
The factors that
determine the cost-effectiveness of the investment, which encompasses both the
construction and the operation of the ILC, are as follows:
· public-private
partnership in terms of investment capital
· using financial aid and
public capital to complete the investment
· low prices of the
services to be rendered by the ILC, conditioning the high utilization rate for
resources and employment maximization
To recapitulate on the
above, it should be noted that the multicriteria decision-making support
methodology has proved efficient as a tool for solving decision-making problems
in relation to the ILC construction.
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Received 20.03.2018; accepted in revised form 26.08.2018
Scientific
Journal of Silesian University of Technology. Series Transport is licensed
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