Unit Reference Value : application in appraising inter-basin water transfer projects

Unit Reference Value (URV) is a common measure in South Africa to assess the economic efficiency of proposed water projects. This is a companion article to an earlier one establishing that the current approach of appraisal of inter-basin water transfer projects (IBTs) with significant pumping costs...

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Bibliographic Details
Published in:Water S. A. 2013-07, Vol.39 (4), p.549-554
Main Author: Du Plessis, J.A.
Format: Article
Language:English
Subjects:
Appraisals
Basins
Biological and medical sciences
Cost effectiveness
Cost effectiveness analysis
Costs
Earth sciences
Earth, ocean, space
Economics
Exact sciences and technology
Fundamental and applied biological sciences. Psychology
Hydrology
Hydrology. Hydrogeology
Inter-basin water transfers
Life cycle assessment
Management
Methods
Operating costs
Project appraisal
Proxy client servers
Pumping
Separation
Unit reference value
Water
Water resources
Water transfer
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Description
Summary:Unit Reference Value (URV) is a common measure in South Africa to assess the economic efficiency of proposed water projects. This is a companion article to an earlier one establishing that the current approach of appraisal of inter-basin water transfer projects (IBTs) with significant pumping costs overestimates likely future water transfers and thereby variable operational costs. Those findings are taken further and it is established that the URV, as currently applied, fails as a suitable measure to appraise such IBTs. From rooting URVs in fundamental cost effectiveness analysis theory a revised URV approach is proposed that provides for a conceptual separation between water transfers affecting operating costs and water transfers used as a proxy measure for effectiveness. The prominent effect of the revised URV approach is demonstrated by means of the example of the proposed Thukela Water Project in South Africa.
ISSN:0378-4738
0378-4738
DOI:10.4314/wsa.v39i4.14