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<br />less than 60 percent, thereby reducing the expected financial returns from irrigated <br />farming. In this regard, Bureau officials told us that operation and maintenance <br />costs on the Animas-La Plata Project could exceed the irrigators' payment capacity <br />by as much as 15 percent. <br /> <br />Since the Dolores Project is nearly complete and repayment terms have been fixed, <br />we focused our review on improving the cost effectiveness of the Animas-La Plata <br />ProjecL Based on the apparent lack of economic justification and financial feasibility <br />of that project's irrigation component, we determined that the Government could <br />(1) save construction costs ranging from $134 million to $171 million by <br />eliminating the non-Indian irrigation component and (2) recover up to an additional <br />$59 million in construction costs that may be put to better use if the Colorado Ute <br />Tribes were willing to convert the water now committed for irrigation to municipal <br />and industrial use, We believe these changes would honor the Federal water <br />resource commitment under the Settlement Act while improving the cost <br />effectiveness of the Project. <br /> <br />, <br /> <br />~: <br />:-; <br /> <br />We recommended that the Bureau revise, to the extent possible, the cost allocation <br />and repayment arrangements of the Dolores Project; reevaluate the economic <br />justification and financial feasibility of developing the irrigation component of the <br />Animas-La Plata Project; and, if warranted, seek Congressional approval to <br />reformulate the Animas-La Plata ProjecL Based on the Bureau's response to our <br />draft report, we considered all our recommendations resolved but not implemented. <br /> <br /> <br />-~ <br /> <br />,. <br /> <br />Joyce N. Fleischman <br /> <br />'1_-- <br /> <br />Attachment <br /> <br />~ ',: <br /> <br />i{ <br /> <br />'{:, <br />r~~ <br /><~, <br /> <br />~~.: <br />