Water Resources:

Bonneville's Irrigation and Drainage System Is Not Economically Justified

RCED-91-73: Published: Jan 31, 1991. Publicly Released: Mar 4, 1991.

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Pursuant to a congressional request, GAO prepared a: (1) benefit-cost analysis of the Irrigation and Drainage (I&D) system of the Central Utah Project Bonneville Unit; and (2) financial impacts analysis measuring the federal cost of not completing the I&D system.

GAO found that: (1) the federal government spent or was contractually obligated for a total of about $320 million for the I&D system; (2) proposed legislation providing for the completion of the system, with some changes, would cost an additional $178 million in federal funds; (3) completion of the I&D system was not economically justified, since the U.S. economy would realize a benefit of only 28 cents for every dollar of project costs; and (4) the financial impacts on the federal government of not completing the I&D system ranged from savings of $133 million, if Congress decided to reallocate sunk costs, to an additional cost of $54 million if Congress decided to forgive the repayment of sunk costs.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The Omnibus Water legislation signed by the President in October 1992 included $150 million for construction of the I&D system under the Drainage and Minor Construction Program.

    Matter: In its deliberation on whether to complete the system, Congress will be considering other factors such as the I&D system's contribution to regional economic development. As part of its decision, Congress should consider the benefit-cost analysis and the financial implications of not completing the system.

 

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