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<br />, <br />/ <br /> <br />. <br /> <br />. <br /> <br />" , <br /> <br />0375 <br /> <br />CHAPTER 2 <br /> <br />CONCLUSIONS & RECOMMENDATIONS <br /> <br />The enthusiasm of the Bureau of Reclamation for managing. <br />the flow of Western rivers and streams has not been matched by <br />an equal interest in managing the stream of income needed to <br />repay the costs of its projects. Indeed, the Bureau's record <br />of cost recovery leaves the impression that the agency views <br />itself more as the financial guardian of its client <br />beneficiaries than of the Federal taxpayers who financed the <br />projects. The audits have disclosed that at many key points in <br />the cost recovery process the Bureau has followed a policy of <br />financial forgiveness. <br /> <br />The repayment problems with the Bureau of Reclamation's <br />water resources program shortchange the Treasury as well as <br />encourage further misallocation of the Nation's natural <br />resources. As long as the responsible officials refuse to act <br />on the recommendations of the Inspector General the situation <br />~ill continue. The level of underpayment already identified <br />will worsen as additional projects are constructed and interest <br />on the unpaid amount compounds. <br /> <br />Principal Findings of This Report <br /> <br />1. The Department of the Interior has failed to implement <br />recommendations from its own Inspector General for the <br />re a ment of Federal funds used to build and 0 erate six ma 'or <br />Federal water and power projects. The repayment shortral <br />identified by the lG, if left unaddressed, would accumulate to <br />well over $10 billion over the next fifty years. This <br />shortfall, when annualized at even the very generous interest <br />rates allowed by law for water projects, will amount to some <br />$67 million per year. (See Table 2 and Chapters 3 through 9.) <br /> <br />2. ~he financial posture of at least two projects now under <br />construction are in critical need of reexamination this year <br />the Bonneville Unit of the Central Utah pro;ect; and the San <br />Felipe Division of the Central Valley Project. Without <br />immediate action by the Congress and the Administration to <br />secure greater commitments for local repayment, the possiblity <br />exists for either: a) an abandonment of costly, partially <br />completed facilities similar to the experience of the Washington <br />Public Power Supply System and other utilities with unmanagable <br />nuclear power projects; or b) a major Federal bail-out of local <br />water and power users beyond the scope of what was originally <br />intended by Corlgress. (See Chapters 5 and 8.) <br /> <br />9 <br />