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Show Project Economics Chafler 4 Development Program as a Whole It is estimated that the cost of the over-all program of water resources control and use by the Bureau of Reclamation and Corps of Engineers in the Missouri Basin will eventually exceed 5 billion dollars.1 The Bureau of Reclamation estimate is 3.1 billion dol- lars, that of the Corps 1.9 billion dollars, as shown on the following page. However, the Corps has a large number of other projects under consideration for which they do not yet have cost estimates. The complementary program of watershed management planned by the Department of Agriculture will cost 3 billion dollars, to which 5.4 billion will be added in expenditures by non-Federal private interests. Other expenditures will be made by other Federal agencies and also by various State and local organizations. 1 Compiled from data submitted to the Commission in November 1950. The figure includes non-Federal costs as well as Federal. It may be regarded as a minimum fig- ure if the program is carried out as presently planned. The 5 billion-dollar total represents an increase, mostly because of increased construction costs, of 300 million dollars over estimates submitted to the Commission earlier in 1950. Detailed breakdown of the 5 billion-dollar total was not yet available at the time of writing. Conse- quently estimates for parts of the programs to be con- structed or completed in the future are the older estimates which correspond to a 4.7 billion-dollar total. For proj- ects or project Units to be constructed wholly or mainly in the future it seems safe to assume that at least 10 percent should be added to all estimates of detail here given. In view of the rapidly rising construction costs during the latter half of 1950, however, all estimates must be con- sidered very rough, and subject to further change until a time when price and wage levels have been stabilized. All the agencies concerned estimate at least three decades for the completion of these programs. It is expected that the revenue-producing features of the program would begin to reimburse the Federal Treasury long before the final cash outlays have been made. The estimated construction costs in July 1950, for completing projects already under way by the Bureau of Reclamation were 820 million dollars and for the Corps of Engineers 1.1 billion dollars. The Bureau has a third of its program, as measured by costs, in progress. The Corps has under way about two-thirds of the projects for which it has prepared cost estimates. The Department of Agriculture has not pub- lished information as to the benefit-cost ratio on its activities, present or proposed. The Bureau of Reclamation has estimated the benefit-cost ratio for its entire Missouri Basin proj- ect, as 1.1 to 1, based on a 100-year life with inter- est at 2.5 percent. Only those units in the project with a higher benefit-cost ratio than 1.1 are recom- mended for construction at this time. The Corps of Engineers, although receiving basin-wide authorization for many of its projects, considers the economics on an individual or feature basis. A summary tabulation was furnished the Commission which presented the first costs, annual costs, and benefits for each reservoir, local protection project or other work. The estimated benefit-cost ratio of individual projects ranged as high as nearly 3 to 1 with only two projects in which the benefits were less than costs. The figures on the following page, summarizing the Engineers' projects, includ- ing those authorized in the 1950 River and Harbor Act, show the average ratio of benefits to costs as 1.45 to 1. 187 |