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Economic Viability And Macroeconomic Impact Of The Burgas - Alexandroupolis Pipeline

Author

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  • Gogas, Periklis

    (Democritus University of Thrace, Department of International Economic Relations and Development)

  • Mourmouris, Ioannis

    (Democritus University of Thrace, Department of International Economic Relations and Development)

  • Papadimitriou, Theophilos

    (Democritus University of Thrace, Department of International Economic Relations and Development)

Abstract

This paper is a condensed version of an actual study commissioned in 2010 to the authors by the Administrative District of East Macedonia and Thrace. The proposed investment plan for the construction of the Burgas-Alexandroupolis Pipeline (BAP) is a significant energy transportation project for South-East Europe and for the local economies in Greece and Bulgaria. The BAP is designed to serve as a complimentary channel to the maritime route of transportation of crude oil from the Black and Caspian Sea to the international markets. The construction and operation of the pipeline is expected to have a significant direct and indirect impact on the national and local economies in terms of increased direct demand for goods and services and employment. In this paper, we thoroughly examine the financial viability of the BAP using an exhaustive number of alternative scenarios as it is a prerequisite for any favorable macroeconomic effects. In doing so, we employ the use of Cash flow analysis, the IRR, the NPV and Break-Even-Point analysis. Finally, after we establish the viability of the investment plan, we investigate its macroeconomic impact on local and national unemployment, GDP and local government revenue that appear to be significant especially on the local level.

Suggested Citation

  • Gogas, Periklis & Mourmouris, Ioannis & Papadimitriou, Theophilos, 2012. "Economic Viability And Macroeconomic Impact Of The Burgas - Alexandroupolis Pipeline," DUTH Research Papers in Economics 1-2012, Democritus University of Thrace, Department of Economics.
    • Handle: RePEc:ris:duthrp:2012_001
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    References listed on IDEAS

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    1. Christodoulakis, Nicos M. & Kalyvitis, Sarantis C., 1997. "The demand for energy in Greece: assessing the effects of the Community Support Framework 1994-1999," Energy Economics, Elsevier, vol. 19(4), pages 393-416, October.
    2. Bernard, Jean-Thomas & Bolduc, Denis & Hardy, Annie, 2002. "The costs of natural gas distribution pipelines: the case of SCGM, Quebec," Energy Economics, Elsevier, vol. 24(5), pages 425-438, September.
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    More about this item

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • N64 - Economic History - - Manufacturing and Construction - - - Europe: 1913-
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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