Structural Dynamics in the Policy Planning of Large Infrastructure Investment under the Competitive Environment: Context of Port Throughput and Capacity

Abstract

Capital investments in developing ports and/or expanding port capacity are costly ventures. The investment and policy planning of port owners would depend on anticipated port throughput. Such issues within an ex ante context are particularly pertinent to the global Port of Hong Kong, as it faces increasing competition from the fast-growing newer competitors within mainland China’s Pearl River Delta region. An appropriate question to pose would be “How do port expansion and the emergence of competitors affect the throughput of a port of interest?” Hence, policy decisions affecting throughput forecasts would be crucial to the sustainability of the Port of Hong Kong. To address such concerns, this paper introduces a dynamic port performance model (DPPM) where a system dynamics approach can be deployed to model the throughput and capacity policy within the context of the Port of Hong Kong. Focusing on the interaction of the various competitive forces that ports face, the DPPM seeks to enhance the structural dynamics behind port throughput in order that better policy and investment decisions can be made, with regard to sustaining investments in upgrading seaport infrastructure. The paper introduces not only a theoretical construct of the DPPM but also attempts to model and validate its use via policy analysis in which ex ante scenarios can be generated.