WATER DEVELOPMENT PROJECT PLANNING
BACKGROUND
ECAFE (1971) examined the cost of water development based on a number of projects that had been funded by the United Nations in Asia. The following discussion is based on their report as it relates to the capital and operation and maintenance costs associated with tubewells and the dependency of these costs on discount rates and aquifer transmissivity. Their information has been supplemented with the experience gained by AGW Consultants in its projects in Africa.
INTRODUCTION
A local or national plan for water development is the outcome of a two-way information exchange between planners and beneficiaries. A development plan is more than a list of desirable goals; it is a projection of progress toward meeting objectives, establishing specific targets and a plan to achieve them. Water development plans do not necessarily consider high rates of return on capital as highly as meeting targeted results. That is, the actual capital costs commonly are secondary to the public good.
However, where capital resources are scarce, a maximum return on investment becomes almost as important as achieving targeted objectives whether it be the supply of municipal water for towns, villages or cities, or the supply of water for agricultural projects. Other benefits from water development plans such as increased employment and increased generation of taxes is not generally considered when evaluating the economics of such plans for acceptance.
It is important at each step in a project to evaluate alternative means for solving technical problems to meet targeted objectives. Items normally examined may be the relationship between depth of water and returns from the crop in an agricultural project. In this case, the optimum depth to water is obtained by comparing the additional cost of lowering drains and to additional output with returns to other investments.
A major technical issue that has almost never been considered is the increased cost to a project, both in terms of capital investment and long term operation and maintenance costs, of locating tubewells in areas of low aquifer transmissivity or of locating wells with less than an acceptable capacity. Water planners in Africa generally establish 10 liters per hour (l/hr) as an acceptable well yield.
Transmissivity is a number that describes the rate at which ground water flows through an aquifer under the influence of a unit hydraulic gradient. Well yield is directly proportional to aquifer transmissivity. For two wells of identical construction detail and production capacity, the overall costs of construction and operation and maintenance will be higher for the tubewell in the zone of lower transmissivity. The difference in overall cost increases with higher ground-water production rates.
DATA REQUIREMENTS
Clearly, any water development plan will require a multidisciplinary approach including engineering, geology, soil chemistry, agriculture, sociology, and finance. Each of these disciplines requires specialized data to make informed choices.
The most serious hazard in data collection is the temptation to collect inappropriate data or too much data and to leave too little time for data analysis. Each type of investigation should be based on a clear understanding the type of data necessary and why it is required.
The "shotgun" approach of collecting masses of data and conducting unfocused studies with the hope that the data may prove important cannot be supported. The tendency for project personnel to conduct studies in their own areas of expertise because that is what they do cannot be supported either.
Researchers estimate that it can take nine times as long to analyze the data as to collect it. Therefore, irrelevant data should not be collected because it wastes analytical personnel. We should only collect data that will lead to precise conclusions at the earliest moment in a project. We believe focused investigations will make other aspects of a project unnecessary.
PROJECT DESIGN CRITERIA
Regardless of project location, capital is generally the scarcest resource. It must be allocated efficiently between competing alternative investments.
Commonly, financing water development projects encourages an over-capitalized design. It is relatively easy to obtain capital for original construction through bond issues or from a central government or an international financing agency. But, it is much more difficult, if not impossible, to obtain financing for recurring operation and maintenance expenditures. Yet, the capitalized value of savings in capital expenditure will finance many times the cost of delayed recurrent expenditure.
This is especially true in developing countries, where capital scarcity and a wide range of profitable investment opportunities result in high discount rates or a high value placed on current capital availability.
GROUND-WATER DEVELOPMENT
We must consider two elements in designing a ground-water development project using tubewells. First, water is a stock resource, which has been stored slowly in an earthen reservoir over a long period of time. Second, ground water may be a renewable resource from seepage from rivers and canals and percolation from fields after rainfall or irrigation.
If recharge is negligible, the only option open is the irreversible exploitation or "mining" of ground water. Such regimes exist at Kufra and Sarir in Libya where the Nubian Sandstone is being mined of its water. In the Chad Basin artesian wells no longer flow. The Ogallala Formation of the High Plains in the United States is being significantly dewatered. The aquifers below the Cities of Venice and Mexico City have been so badly mined that ground subsidence has been going on for years. Other examples are numerous. Mining of coastal aquifers has led to salt water intrusion into the aquifers such as: the Morphou (G?zel Yurt) area of Cyprus and the Kino Bay area of northwestern Mexico.
COST OF EXPLOITATION
Where ground water is mined, the increased pumping cost resulting from mining increases the pumping cost of water forever, and should be capitalized and compared with the benefits obtained from the use of the water.
The cost of ground-water production from tubewells in the North Rohri project area in Pakistan was estimated as Rs 1.52 per acre per acre-foot of water for five feet of additional lift caused by mining the aquifer.
We have used the downloadable spreadsheet (English units or Metric units) on this web site for calculating the additional cost. We have made several assumptions. They are:
1. We adjusted the aquifer transmissivity to give five feet of drawdown.
2. The aquifer storage coefficient is 10 percent.
3. The Well operating factor is 80 percent.
4. The cost of electric power is 0.10 USD per kilowatt hour.
5. Overall Pump Efficiency is 70 percent.
6. Overall Motor efficiency is 70 percent.
7. One acre foot is produced over an eight month period.
The spreadsheet calculates the cost of producing the one acre foot of water as $0.14/af. At an exchange rate of Rs 9 = 1.00 USD the cost of the water is Rs 1.26. The actual cost estimated by other workers is Rs 1.52. The agreement is very good given the uncertainties in input data and the exchange rate when pumping costs were calculated.
When capital is limited, we must choose a design criterion that achieves minimum annual costs. Annual costs consist of amortized capital cost plus average annual operating and maintenance costs. We believe minimum present value is a more suitable measure because it takes account of the timing of operation and maintenance costs. Thus, no average need be taken, and it also follows most closely the pattern required for cash-flow estimation generally used for cost benefit analysis.
In a study of the Lower Indus Basin, it was shown that tubewell capital costs are a linear function of depth and discharge, but operation and maintenance costs are quadratic.
RESULTS
Using the present value criterion, either optimum discharge or depth can be determined. The appropriate discount factor is applied to the operation and maintenance cost equation. The two equations are added and the differential of cost with respect to discharge or depth is taken. The equations are solved for the minimum cost by setting the first differential to zero.
This analysis shows water planners that the optimum discharge for a well is as large as is feasible. Optimum depth, however, depends on discount rates and aquifer transmissivity.
For low capacity wells, the marginal increases in overall cost as a function of discount rates and transmissivity is small. But, as well capacities and overall demand increase, the influence of aquifer transmissivity on overall cost increases substantially. Enter into the spreadsheet your own data and compare it to your actual cost experience.
The expected production capacity of wells will determine the suitability of expensive ground-water exploration projects.
There can be little justification other than social and political policy for expensive ground-water exploration projects for low-capacity village wells except in areas of extreme aridity.
On the other hand, more expensive ground-water exploration projects can be easily justified for high capacity wells for municipal, industrial and agricultural purposes.
Fortunately, there are different ground-water exploration methods to suit the range of situations.
For example, AGW scientists have used fracture trace analysis to successfully locate low capacity wells in West Africa very rapidly and very inexpensively. In fact, in Burkina Faso the very first well we located using fracture-trace analysis turned out to be very close to a well that another agency of the government had located using more time-consuming and much more expensive earth resistivity geophysical methods.
In Mali, prior to the beginning of the Mali Livestock Project, AGW scientists used very inexpensive, hydrobiological ground-water-exploration methods. Hydrobiological methods enabled us to pick well sites in the Sahel about as fast as we could drive through the countryside.
For larger capacity wells for municipal and industrial purposes, AGW scientists have used a combination of more costly hydrogeological investigation and Thermonic geophysical methods.
CONCLUSIONS
When we evaluate the technical alternatives of ground-water-development programs we must consider, among other things, the water requirements of the project and the number and distribution of wells in relationship to hydraulic properties of aquifers, the construction, operation and maintenance costs and the cost of capital.
REFERENCES
ECAFE, 1971, Water Resources Journal, ST/ECAFE/SE.C/90
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