Cost benefit analysis of deepening Vaeroey Port

Vaeroey Port is a small port on an island in Lofoten in Nordland county. The port is receiving fish from fishing vessels and serving vessels with diesel and maintenance. The port is consists of two bays; Soerlandsvaagen and Roestnesvaagen. The considered project is to deepen both bays. It is the pelagic industy at Vaeroey that gains most from the project. If we assume a discount rate of 8 % in the main alternative, we get a net present value of 0 which means that the costs equal the benefits from the project. If the discount rate is increased to 9 % the benefits are less and the project should not be carried out. Sensitivity tests have been carried out to see the effects of changed assumptions.