Title: Dealing with uncertainty in design of port infrastructure systems

Authors: P. Taneja, H. Ligteringen, M. Van Schuylenburg

Addresses: Faculty of Civil Engineering, Section of Hydraulic Engineering, Delft University of Technology, P.O. Box 5048, Delft 2600 GA, The Netherlands. ' Faculty of Civil Engineering, Section of Hydraulic Engineering, Delft University of Technology, P.O. Box 5048, Delft 2600 GA, The Netherlands. ' Port of Rotterdam Authority, Postbus 6622, Rotterdam 3002 AP, The Netherlands

Abstract: Ports exist by the grace of international trade. In the volatile and uncertain environment of globalisation, liberalisation, rapidly changing technologies, competition, threats and budgets, this trade is highly unpredictable and investment in port infrastructure highly risky. This paper suggests that many uncertainties that ports infrastructure systems will face during their projected lifetime cannot be addressed through the traditional predict-and-act approach of port master planning. An adaptive approach to port master planning, coupled with flexible and evolutionary design solutions, will help us to confront the uncertainty of what lies ahead and ensure long-term functionality, capacity and quality of large-scale, capital-intensive port infrastructure. This paper also emphasises that modern evaluation techniques like |real options|, which help to justify incorporation of flexibility in infrastructures, are more suitable than traditional methods for investment decisions in uncertain times.

Keywords: port infrastructures; ports; containers; infrastructure design; port planning; adaptive planning; uncertainty; flexibility; dynamic strategic planning; investment justification; evaluation; real options.

DOI: 10.1504/JDR.2010.032073

Journal of Design Research, 2010 Vol.8 No.2, pp.101 - 118

Received: 02 Mar 2009
Accepted: 24 Jul 2009

Published online: 08 Mar 2010 *

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