Expansion of the Port of Rotterdam: Framework for Evaluation

Abstract

Ports require large investments from public and private sources. Although they generate benefits to the regional and national economy, they have important negative effects on the environment and cause traffic congestion as well. Competition between ports has increased substantially. As a result, port efficiency and commercial attractiveness have received more emphasis. The traditional role of government in providing port infrastructure is increasingly being questioned. Public and private roles need to be differentiated more clearly. These factors cause a rising interest in untangling issues of public welfare and commercial interests; a proper framework for evaluation is called for. In response, a framework for evaluation by differentiating public welfare and commercial aspects is presented. The framework is applied to a planned project for seaward expansion of the Dutch port of Rotterdam: project Maasvlakte 2. In this framework, it is necessary to ( a) adopt a proper economic scenario and associated demand forecasts for port services, ( b) account for alternatives to the physical expansion of the port area, and ( c) account for the indirect and external effects of port activities. In particular, the indirect effects play a crucial role in the evaluation of a project such as Maasvlakte 2, as they are expected to represent a major portion of the net contribution to public welfare.