Imrecon

Regulated utility and transport industries are generally capital intensive and the capital programme is an important driver of cost and of service performance. 

An objective of economic regulation might therefore be to provide an effective incentive environment for the planning and procurement of the programme and the subsequent maintenance and operation of the infrastructure.  The problem, of course, is that the naturally long time horizons for the capital programme do not fit well with a typical regulatory cycle.  This is less of a problem for relatively mature sectors with a need only for relatively little new capacity each year, but it can be a critical regulatory problem for sectors where there is rapid growth, major capacity issues or very lumpy investment patterns.  The regulated airport sector has all three.

To help inform the thinking about new regualtory approaches to airport regulation, and also to inform consideration of longer term financial risk issues, Imrecon collaborated with Dr William Hynes of University College Dublin to develop a methodology for modelling longer term capital programmes, modelling the drivers and constraints for capacity and maintenance investment at a high level to generate dynamic forecasts of investment programmes. 

Programme modelling combines with simulation modelling to provide a more dynamic and richer perspective on longer term strategic or policy issues.