THE ECONOMICS OF DREDGING SAND AND GRAVEL FOR AGGREGATE

Sand and gravel is dredged from the sea bed at certain offshore sites of the U.K. This material is primarily intended aggregate for concrete. The dredgers used in the industry range in hopper size from 300 tons to 2300 tons with even larger sizes in prospect. This report is concerned with some of the economic aspects of this relatively new and growing industry as revealed by a study of one particular firm and its vessels. The firm studied, herein called SAGAMORE, operates in several coastal areas with a fleet of trailing suction dredgers. The data has been analysed by treating each dredger as though it were a separate firm, the objective being to arrive at an internal rate of return (IRR) for each dredger. The implications of differences in IRR as related to vessel size are noted and used to develop a model for a tug/barge/dredger operation in one coastal area. The vehicle for analysis is a price model using discounted values of future revenue and costs to establish the IRR that makes the net present value of such cash flows equal to zero. The sensitivity of the IRR to variables is noted. The results indicate that the tug/barge/dredger combination has a higher rate of return than the traditional system. For simplicity the firm under study has been called SAGAMORE and vessels, banks, ports and customers given code letters and numbers.

  • Supplemental Notes:
    • Paper A-2 from BHRA Fluid Engineering Symposium, University of Kent, Canterbury, England.
  • Corporate Authors:

    British Hydromechanics Research Association

    Cranfield MK43 0AJ, Bedfordshire,   England 
  • Authors:
    • Artz Jr, J C
  • Publication Date: 1975-9

Subject/Index Terms

Filing Info

  • Accession Number: 00128414
  • Record Type: Publication
  • Source Agency: British Hydrodynamics Research Association
  • Files: TRIS
  • Created Date: Jan 14 1976 12:00AM