A dynamic modeling approach for infrastructure project evaluation under evolving risks

Infrastructure systems integrate physical, financial and environmental processes whose interactions shape long-term project outcomes, yet conventional evaluations often treat these domains separately. We introduce a dynamic evaluation framework that captures cross-domain feedbacks on a single decision timeline and explicitly compares its results with a conventional penalty-based financial appraisal. The framework adopts a standard structure for sequential decision-making under uncertainty supported by Monte Carlo simulation. An illustrative pipeline case study is used to demonstrate the approach, focusing on financial feasibility while routing physical degradation and environmental charges through the project cash cascade. Simulation experiments show that disturbances generate non-linear financial risks and a higher probability of falling below the profitability threshold than suggested by the traditional assessment. We also propose a slope-based diagnostic that indicates when dynamic evaluation is warranted under evolving risk conditions, supporting more integrated and risk-sensitive appraisal of infrastructure projects in uncertain environments.