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Show Project Economics Chapter 6 A complete descriptive analysis of the economics of the full Columbia Basin water resources develop- ment program was not possible in June 1950. Such an analysis would present benefit-cost ratios by projects for the program as a whole and for func- tional parts of the program. Similar data would be given for repayment records or probabilities, as- signment of cost burden, and other features of reimbursement. Costs, benefits, and other eco- nomic aspects are of course well known for many of the existing, under construction, and authorized projects. However, the economic aspects of many important future actions are imperfectly under- stood because time and data have not yet permitted the necessary calculations. The ultimate costs, ul- timate benefits, and estimates of other economic features of the development program in quantita- tive terms therefore are not attainable, but as pro- grams reach the review stage before authorization, all benefit-cost ratios should be scrutinized carefully. Even a partial economic analysis of water re- sources development in the Columbia Basin cannot arrive at consistent answers, since methods of cal- culation, accounting, and assignment differ by agency and purpose. In general, the methods of calculating costs of programs and the extent of reimbursement to the Federal Treasury for program construction costs are either prescribed by law or are in accordance with general procedures. Current and future economic practices and pro- posals accordingly must be discussed separately by function. In many cases the only satisfactory anal- ysis is by individual project. About 631 million dollars has been spent by the Federal Government on water resources develop- ments now completed within the basin. Of this total, 410 million dollars has been spent on electric power facilities, 133.5 million dollars on irrigation, 11.2 million dollars on single-purpose flood control, and 72 million dollars on navigation. On all proj- ects constructed to date, benefit-cost ratios may be assumed to have been favorable. The 410 million dollars spent on presently oper- ating hydroelectric power facilities includes Bon- neville Dam power allocation, the Bonneville Power Administration's transmission system, and that share of Grand Coulee construction costs allo- cated to power. All of these costs are reimbursable- Past expenditures for federally developed irriga- tion likewise have been reimbursable, except 2.3 million dollars (1.7 percent) which has been writ- ten off by Congress. The contract obligations of 131 million dollars cover 13 projects, through which 865,000 acres of new irrigated land have been brought into cultivation, and supplemental water provided for 1.2 million acres in private or cooperative undertakings. The capital cost for the entire Federal development thus was about $65 per acre, very low as compared to average present-day development costs. As reported by the Bureau of Reclamation, about 99 percent of repayment obli- gations which had fallen due by June 30, 1949, had been paid after provision for adjustments and ex- tensions had been made by Congress (33.7 million dollars out of 34.2 million dollars due). This high repayment figure by direct beneficiaries is an indi- cation that total benefits have exceeded costs for past irrigation development. However, data on annual benefits and costs are available only for a few recent projects. That some of the adjustments required to meet special cases are serious and costly is best indicated, perhaps, in table 3 and its accompanying foot- notes which shows the record of repayment on a group of irrigation projects up to 1947: 27 |
