Utah State University DigitalCommons@USU
Reports Utah Water Research Laboratory
January 1978
Cost Allocation Alternatives for the Senegal River Development Program
J. Paul Riley
Jay C. Andersen
A. Bruce Bishop
David S. Bowles
John E. Keith
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Recommended Citation Riley, J. Paul; Andersen, Jay C.; Bishop, A. Bruce; Bowles, David S.; and Keith, John E., "Cost Allocation Alternatives for the Senegal River Development Program" (1978). Reports. Paper 130. https://digitalcommons.usu.edu/water_rep/130
This Report is brought to you for free and open access by the Utah Water Research Laboratory at DigitalCommons@USU. It has been accepted for inclusion in Reports by an authorized administrator of DigitalCommons@USU. For more information, please contact [email protected]. Cost Allocation Alternatives for the Senegal River Development Program
J. Paul Riley Jay C. Andersen A. Bruce Bishop David S. Bowles John E. Keith
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Utah Water Research Laboratory College of Engineering Utah State University Logan, Utah 84322 WATER RESOURCE PLANNING SERIES, August 1978 UWRL/p·78/06 COST ALLOCATION ALTERNATIVES FOR THE SENEGAL RIVER DEVELOPMENT PROGRAM
by
J. Paul Riley Jay C. Andersen A. Bruce Bishop David S. Bowles and John E. Keith
Funds for the work reported in this document were provided by Cooperative Agreement IQC/AID/afr/c/e/1140, Work Order No. 10, between the International Programs Office of Utah State University and the Agency for International Development, U. S. Depart ment of State. Investigation Period: September 1, 1976 to July 31,1977.
WATER RESOURCE PLANNING SERIES UWRL/P-78/06
Utah Water Research Laboratory College of Engineering Utah State University Logan, Utah 84322
August 1978 ABSTRACf
The primary purpose of the study reported herein is to present methods for us ing estimated project benefits as the basis for distributing the capital, operating, main tenance, and replacement costs associated with the proposed Senegal River development program. The problem is complicated because the Senegal River is an international stream, so that it is necessary to consider not only the various economic use sectors involved with the program, but also the three separate countries of Mali, Mauritania, and Senegal.
In attempting to meet the primary objective stated above, the report proposes an economic model which estimates economic benefits of the development program for each of various use sectors. These benefits then are distributed to each of the three participating countries. In order to demonstrate the use and capabilities of the model, the results of several computer runs are included in the report. Each run is based on specific assumptions concerning such parameters as commodity prices and rate of pro ject development. The model is based on sound economic principles, but at present there are many unknown factols and conditions associated with the proposed river de velopment program. Thus, the model results contained in the report are of necessity based on many assumptions. For example, the project configuration itself was assumed. However, at the present time the model is capable of providing some indications of the relative sensitivities of the economic system to various input parameters and system vari ables.
Four commonly accepted cost allocation methods are examined and of these, one method, the adjusted separable costs-remaining benefits method, is recommended for adoption in future cost allocation analyses pertaining to the proposed Senegal River de velopment program. In this connection, as project configuration, costs of production, and other input quantities become more clearly defined, cost allocations suggested by the model will become more accura