OCR Text |
Show Project Economics Chapter 4 From a financial point of view the past water resources program in the Colorado Basin gener- ally has been highly feasible. The excellent sites for hydroelectric power, the expanding power mar- ket, the broad contiguous areas of good irrigable land along the lower reaches of the river to which irrigation water could be supplied readily, and the large municipal water needs of the Los Angeles area have all combined to make larger completed projects eminently feasible. Some of the smaller projects have experienced difficulties, but on the whole, they too have lived up to expectations. Future prospects are not so bright. The great difficulty is higher cost for irrigation. Flood Control The Colorado River Basin experiences severe floods and in the heavily used areas flood losses have been large. Benefits from prevention will be large on the authorized projects. The completed flood control project of the Corps of Engineers at Hol- brook, Ariz., cost $362,700, of which $355,000 was Federal and $7,700 non-Federal. The total esti- mated annual charges of this project are $14,600, of which $13,000 is Federal and $1,600 non-Federal. The total estimated annual benefits are $19,300. The benefit-cost ratio of this project is 1.32 to 1.00. The estimated costs of other authorized projects are 35.7 million dollars, of which 35 million dollars is Federal and the rest non-Federal. Total esti- mated annual charges for these projects are 1.5 million dollars of which 1.46 million dollars is Fed- eral and $37,000 is non-Federal. Total estimated annual benefits are 1.81 million dollars. The over- all benefit-cost ratio of these projects is 1.20 to 1.00. Other projects proposed and under consideration by the Corps of Engineers would cost about 27 million dollars, and the benefit-cost ratio of this total would be slightly over unity. Irrigation When present in-construction projects in the Colorado Basin are completed, total irrigation costs will be approximately 285 million dollars.1 This does not include costs for other functions of multi- ple-purpose projects where they can be separated. Of this total approximately 70 million dollars is for irrigation on Indian lands. The total does not include any costs for Hoover Dam, all of which have been allocated to other functions. However, present and projected irrigation along the lower river will benefit significantly from Lake Mead storage. The 285 million dollars does not represent the total cost of irrigation development in the basin because it does not include diversions to other basins, the costs of which exceed 175 million dollars. Much of this cost is allocable to other functions. According to Bureau of Reclamation estimates, costs per acre in the Colorado Basin for completed and in-construction irrigation projects are com- paratively low, but there is great variation. Most of the large projects have per acre costs between $100 and $200, and most of these are below $150 per acre, such as the Grand Valley Project in Colo- rado, with per acre costs approximately $141. If parts of the Hoover Dam costs were allocated to irrigation some of the larger acreages in the lower river projects would show much higher per acre costs. 1 In terms of costs estimated during several years prior to 1950. 383 |