| Abstract: | ABSTRACT: The methodology underlying, and the estimates incorporated in the Corps of Engineers' economic evaluation of the Arkansas River Basin Chloride Control Project are evaluated and judged deficient in several ways. An improperly specified alternative cost analysis probably results in overestimates of the total regional demand for water, the demand for Arkansas River Water, and the cost-savings realized with the project in place. The quantitative effect of these errors is not determined. However, other adjustments are identified which are evaluated using the Corps' data. These adjustments reduce B/C from 2.64 to 0.57; principally as a result of corrections for over-estimates of cost-savings in steam-electric generation, and for use of improper discounting procedures and gross output-earnings ratios. |
