Bureau of Reclamation:

Information on Allocation and Repayment of Costs of Constructing Water Projects

RCED-96-109: Published: Jul 3, 1996. Publicly Released: Jul 29, 1996.

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Pursuant to a congressional request, GAO reviewed the costs of constructing federal water projects, focusing on: (1) the allocation of costs among various projects; (2) irrigators' repayment of their share of costs; and (3) changes in reclamation law since 1902 regarding the allocation of projects construction costs and repayment requirements.

GAO found that: (1) since the start of the reclamation program in 1902, irrigators generally have had 40 years or more to repay without interest their share of water project construction costs; (2) if irrigators are unable to repay their share of project construction costs, the costs are repaid from other project revenues, primarily hydropower revenues; (3) if the federal government determines that special circumstances exist in the irrigated area, such as unproductive land, drought, or depressed economic conditions, it will relieve irrigators of portions of their repayment obligation; (4) the Bureau of Reclamation has determined that $16.9 billion of the $21.8-billion investment in water projects is reimbursable to the federal government; (5) while $7.1 billion in reimbursable costs have been allocated to irrigators, the irrigators are scheduled to repay only $3.4 billion, because their obligations have been adjusted by irrigation assistance and charge-offs; (6) $3.4 billion of the $7.1 billion of reimbursable costs owed by irrigators will be paid by other sources, primarily hydropower revenues; and (7) $373.1 million of the $7.1 billion of reimbursable costs owed by irrigators has been charged off.

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