Life Cycle Cost Analysis of Jayakwadi Irrigat...

Life Cycle Cost Analysis of Jayakwadi Irrigation Project

Author Name : Yogesh Dabhade, Prof. (Dr.) Arun Kumar Dviwedi

ABSTRACT

Large dams which provide economical irrigation water, hydropower and water supply are useful for the human being and society since long period. The costs and poor performance of large dams were in the past largely concealed. A total cost of ownership (TOC) of dam project consists of fixed and recurring costs. The life cycle cost analysis (LCCA) of project gives the indication about the economic sustainability of project. The upshots can be used to find out the reasons for economic loss of the dam project and the logical ways to alleviate the losses. According to the report of World Commission on Dams (WCD), the large dams have been marginally economically viable. As per report, the average cost overrun of dams is 56%. In too many cases, the burden of uneconomic dams is shouldered by a nation's citizens. Being an economical source of water and energy, many of the world's large dams are currently being built in the poor nations, which would be burden for them, if perform below par.  

A life cycle cost analysis (LCCA) includes all the cost and benefits of a project during its life cycle. In a traditional method of cost analysis only the initial construction and procurement of machinery are taken into account. The outcome of analysis can be used for comparing the two or more projects and also to analyze the cost and benefits of a single project.

 Inthis study the preliminary LCCA of a major irrigation project, i.e.,Jayakwadi Irrigation Project of Marathwada region of Maharashtra is done. The project is on Godavari River, which is the major river of this region. The water scarcity is one of the main issues of the region. According to the report of Subramanian Committee Report (1987), 23 talukas of region are drought prone comprising of 39% area and 36% population. The total irrigated area is 12%.  

The literatures on LCCA are reviewed and the annual life cycle cost (ALCC) of each project is estimated by using the basic principle of LCCA. The analysis for the Jayakwadi is done considering irrigation and power generation together and in isolation too for six different scenarios.

This analysis reveals that the benefit cost ratios of the projects are not attractive, if only the tangible benefits due to irrigation only are taken into account. The comprehensive study of intangible benefits of projects and their quantification in terms of money would correctly depict the outcome of LCCA.

Keywords: Life Cycle Costing, Life Cycle Cost Analysis, Total Cost of Ownership, Cost Analysis