Date of Award:

5-1967

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Applied Economics

Department name when degree awarded

Agricultural Economics

Committee Chair(s)

A. D. LeBaron

Committee

A. D. LeBaron

Committee

G. T. Blanch

Committee

L. H. Davis

Committee

R. A. Christensen

Abstract

This thesis is an evaluation of the methods and assumptions employed by those groups responsible for preparation of the original benefit/cost data describing the Sefeed Rood project. Benefit/cost ratios reported by the French engineering firm, Cotha Sogreah, and Plan Organization in a joint study range from 2:1 to 2.6:1 (6 and 10). A priori these seem suspect since the dam plus necessary canals and diversion works are obviously large and costly and only primary benefits are considered. The question is whether the potential benefits are likely to ever yield a positive return on investment and, if so, how long a pay-off period will be required.

The office of planning of Plan Organization of Iran has prepared separate benefit/cost data (unpublished) in 1964 for the same project in considerably greater detail.1 Whereas, the French figures assumed technological duration ranging from 60 to 100 years for the various structures, the intent of the Plan Organization is to determine the length of time necessary to reach a break-even point. This turns out to be 1976 and implies an even quicker pay-off than assumed by the consulting engineers. The latter predicted the need for government subsidies for about 33 years before annual returns would exceed costs. Since construction began in the middle 1950's, the French data indicate break-even in 1988-1990 at the earliest. It must therefore be inferred that the Plan Organization data (reworked in 1964) are most likely to be "wrong" and subsequent analysis proceeds according to the following objectives:

  1. To determine the C/B ratio from published planning data.
  2. To calculate additions or diminutions to published primary and secondary benefits.
  3. To evaluate the published planning data in terms of official American procedures for primary and secondary benefits from water resource development.
  4. To contrast the corrected net returns on investment in terms of project "break-even point" with official expectations.

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