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. A stylized pipeline case illustrates 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.