Port Investments in an Uncertain Environment

This contribution focuses on some specific aspects of port investments related to the large amounts of capital needed for some types of port investments and the long payback time of the projects. The first part treats the problem of private and/or public involvement and the impact on the competitiveness of a port. Next, the consequences of uncertainty in combination with large sunk costs for the rules which guide the decision to invest are examined. The last part considers the problem of forecasting port traffic and its volatility because they are crucial for an accurate evaluation of the investment projects.