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<br />
<br />COLORADO RIVER STORAGE PROJECT
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<br />27
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<br />
<br />COMMENTS ON THE BUnEAU'S FINANCIAL AND ECONOMic
<br />ANALYSES. DATED FEBRUARY 1958 AND DECEMBER 1958
<br />
<br />The first financial and economic analysis of the Colorado River
<br />Storage Project and par,ticipating projects dated February 1958 was
<br />transmitted to the Presi<ilent of the Senate on April 15, 1958, and was
<br />published later as Senate'Document 101, Eighty-fifth Congress, second
<br />session, In transmitting the analysis, the Secretary of the Interior
<br />emphasized that, with Gonstruction just starting on initially sched-
<br />uled units, the analysis was based largely on planning estimates with
<br />such refinements as were possible in a few instances from detailed pre-
<br />construction estimates and from bids on construction work, The
<br />Secretary stated also that the analysis will be reviewed and revised
<br />periodically as detailed il'vestigations and construction of the develop-
<br />ment progress and as ne~ data becomes available,
<br />The second economic fanalysis of the Colorado River Storage Proj-
<br />ect find participating prpjects datcd December 1958 is a supplement.
<br />to the first report, It primarily incorporates changes in the rate and
<br />schedule of developmeI;lt, The basic assumptions and procedures
<br />used in preparing the first analysis were also used for the second
<br />analysis, '
<br />Our observations and'comments on certain aspects of the financial
<br />and economic analyses follow:
<br />
<br />Increase in construction cost estimate
<br />The Bureau of Reclamation estimated the cost of the Colorado
<br />River Storage Project arid participating projects as $933,660,000 when
<br />the ,Congress was considering passage of the Oolorado River Storage
<br />Project Act, approved .Npnl11, 1956. In Its lcebruary 1958 analYSIS,
<br />construction costs of authorized projects Were estimated by the
<br />Bureau to total $992,174,000,
<br />In the December 1958 analysis, this estimltte had been increased
<br />by $11,376,000 and totaled $1,003,550,000, The $11,376,000 increase
<br />consists of. $1,849,000 re,presenting the cost of additional recreational
<br />facilities at the Flaming Gorge and Navajo storage units and $9,-
<br />527,000 representing the; net increase in costs of participating projects
<br />summarIzed as follows: :
<br />
<br />Project
<br />
<br />InereastOr
<br />.1)ecrea8e(~)
<br />
<br />PaonilL___~~____________~~..____~_.___n__u_ $680,000
<br />Pine Rlver Extens10n___"n____un__________~ -5,294,000
<br />ffi:i~~rid~~~::: =:: =:::::: ::: :::: ::::::::::::: ~~~; ~~~
<br />SOlldskadee. ~ .~___._n___._______.____________ 12, -us, 000
<br />TotaLrun___un_n_____n____________ $9,527,000
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<br />The Pine River Extellsion Project has been determined to be eco-
<br />nomically infeasible arid is not scheduled for construction, The
<br />$12,415,,000 increase inlthe cost of the Seedskadee, Project is based
<br />on a Definite Plan Report dated November 1958, In this report, a
<br />dam and reservoir for storage are recommended in place of the pre-
<br />viously recommended diversion dam, The report also recommends
<br />"wildlife refuge costing $1,070,000 and recreational facilities not in-
<br />eluded in the previous a;nalysis,
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<br />50566-60-6
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