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A Preliminary Benefit Cost Analysis of the Inland Diversion of the Coastal Rivers of New South Wales

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  • Davidson, Bruce Robinson
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    The Water Resources Commission of New South Wales has calculated the capital and operating costs of diverting the amount of water which would be available in the driest year from the major coastal rivers to the inland streams of New South Wales. A preliminary benefit cost analysis of the least cost diversion to each inland stream, using a discount rate of 3 per cent, indicates that at present prices and yields none of the projects would have a benefit cost ratio of greater than 0.93, even if all of the diverted water were utilised immediately by farmers for the most profitable activity. If a discount rate of 7 per cent is used, this benefit cost ratio would decline to 0.52. If water is taken up at the same rate as it was after Copeton Dam was completed on the Gwydir River and utilized for the same purposes as it is on the inland rivers at present, no scheme would have a benefit cost ratio of more than 0.31, and most would have a benefit cost ratio of less than 0.22, using a 7 per cent discount rate.

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    Article provided by Australian Agricultural and Resource Economics Society in its journal Review of Marketing and Agricultural Economics.

    Volume (Year): 52 (1984)
    Issue (Month): 01 (April)

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    Handle: RePEc:ags:remaae:12339
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