Economic methods and criteria used for the optimization of capital investments in water management

Abstract

1. In many countries, water management is becoming a complex integrated system, which is closely related to, and frequently exerts a decisive effect on, the development of many other fields and of the national economy as a whole. The main problems in the field of water management in several countries are, at the present time, control of the increasing contamination of water resources and the optimum administration of the development and operation of water-management systems. The socialist system offers the best possibilities for successful solution of the problems in this field. It is necessary to ensure the fastest and fullest utilization of these possibilities. 2. In the field of water management there is now in many countries a general tendency toward wide utilization of large electronic computers and modern mathematical methods of optimization. In the Soviet Union it is necessary to devote further attention to this aspect. 3. The optimum administration of the development and operation of water-management systems calls for the improvement of the hierarchical structure and organizational forms of administration of water management in the USSR. 4. One of the most important practical problems in water management is the definitive improvement of the procedures for distributing capital and operating costs among the different participating components in an integrated development (alternatives, etc.), and their conversion into financial solutions. 5. For the successful solution of the problem of optimization of integrated water-management systems, it is necessary to unify the procedures utilized by the different participants in the integrated developments for justifying the economic effectiveness of their solutions. 6. In view of the important role of large integrated water developments and of large hydroelectric plants in the creation of the infrastructure and specialization of new regions, and also because of their many social effects, which cannot be included in a direct economic analysis, it is advisable to adopt in major water management and hydropower construction a high standard coefficient of effectiveness (En=0.08), in comparison to the coefficients used in the national economy.