Proper design of the urban infrastructure is crucial to develop civilization in a developing area. While there are dozens of managerial suggestions to go along with the static aspects of components in urban infrastructure design, hardly any piece of advice may be found to ensure dynamic outcomes of the whole design in advance. In this paper, a novel system dynamics model is introduced and applied in this context as a contribution in order to fill the research gap. The modular nature of the model development helps to alleviate the challenge of simultaneous design of components and system, with the potential capability of both static and dynamic verification. It allows the decision aider to observe the results of policies with the growth of the model over time and be informed of the consequences of policies before deployment. The model is developed for the water infrastructure design. It involves various inter-related subsystems such as industry consumption, geographical location, and labor asset. According to the scope of the model, Chabahar free-zone is selected as a case study to validate the temporal aspects of the model design. A comparison is also made between two policies for water supply. The consequences of adopting each policy on other aspects of the free-zone development are discussed. The model truly depicts that the main challenge in developing the water infrastructure, considering the geographical condition of Chabahar, is choosing an efficient and beneficial way to supply water for industrial and urban consumption.