30
I.
Introduction
Fig. 1.10 Relationships between present value of benefits and cost for varying
scales of project.
how weight the respective criteria or indicate the general domain of acceptability for each. The general mathematical expression (s) that details
the revenue and costs contributed to the selected criterion is known as the
objective function.
In determining the pertinent revenues and costs it is necessary to examine each physical quantity in the river basin together with the intangible
revenues and costs, insofar as the latter can be quantified. Figure 1.10
illustrates figuratively the benefits and costs of a river basin project as a
function of the scale of the project. Let us look at the costs first. One must
be careful to avoid omision of important and costly features of the water
resources system, such as drainage or leveling of the newly irrigated land,
that may escape being included in the cost estimate. The cost of adverse
effects such as relocation of transportation systems or resettlement of the
population of an inundated area should be included in project cost, whether
or not these costs are compensated. The project cost should include all the
costs for the establishment, maintenance, and operation of the project.
In a few instances costs will be subtracted directly from benefits to achieve