Intra-Port competition, regulatory challenges and the concession of Callao Port

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The goal of this paper is to analyse which concession alternative for Callao port, mono- or multi-operator, is more beneficial for the Peruvian society. The author uses the regulation theory, publicly available data, Monte Carlo simulation and real-option theory to analyse the viability of the concession under both alternatives. Its main findings are the following: (a) Although it seems preferable to concession Callao under a multi-operator scheme, superiority of one option over the other will depend on the nature of the port’;s cost function. If the latter is sub-additive for the forecasted demand, a mono-operator option would be more desirable. (b) If the concession of Callao port was to be carried out under a mono-operator scheme, the Peruvian Government could obtain proceeds in excess of US$ 60 million, or port users could expect to pay 22% lower tariffs for the use of the infrastructure. (c) Without a subsidy, the mono-operator alternative is the only viable one. (d) The real cost of the required subsidy, imposed on the Peruvian society, could amount up to US$ 12 million, while the benefits of the multi-operator alternative would amount up to US$ 60 million. Therefore, its benefits being higher than its costs, it is preferable to concession Callao port under a multi-operator scheme, even if a subsidy is required.
Original languageEnglish
Pages (from-to)279-311
Number of pages33
JournalMaritime Economics and Logistics
Issue number4
StatePublished - 1 Jan 2004
Externally publishedYes


  • Competition
  • Concession
  • Monopoly
  • Multi-Operator scheme
  • Pro-Competitive policy
  • Regulation


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