The contested Bay Delta Conservation Plan is not economically justified, according to an independent cost-benefit analysis of the proposed project by the Business Forecasting Center at the University of the Pacific in Stockton.
The centerpiece of the plan is to build twin tunnels running underneath the Sacramento-San Joaquin River Delta to pull water from the Sacramento River and send it to residents and farmers in Southern California.
Jeffrey Michael, director of the Business Forecasting Center and author of the report released Friday, found that the cost of the tunnels is about $7 billion higher than the potential benefits. That comes out to about $2.50 in costs for every dollar of benefit, or a benefit-cost ratio of 0.4.
In comparison, the revised benefit cost analysis for California's high-speed rail project has a ratio of about two.
The total cost of the water conveyance tunnel proposal is about $13 billion.
The economic benefits of the tunnels include water supply, water quality, and earthquake risk reduction for areas that receive water exported from the Delta by the State Water Project and the Central Valley Project.
The economic costs include project capital costs, operating and maintenance costs for the completed tunnels, and the costs to areas in the Delta and surrounding area that might be hurt by the project.
"Benefit-cost analysis is an essential and normal part of assessment and planning of large infrastructure projects such as the $13 billion water conveyance tunnel proposal, but has not been part of the BDCP," said Michael in a press release.
Estimates of benefit and cost were drawn from recent information from the BDCP and other state agencies.
Advocates for the project say it's too soon to say whether the project is economically justified.
The plan is part of an ongoing study, and a cost-benefit analysis cannot be understood until a draft BDCP and environmental review documents are ready, said Clark Blanchard of the California Natural Resources Agency.
"BDCP is working to define sustainable water supply yields in a scientifically uncertain ecosystem and to define the economic value of those supplies — both efforts are unprecedented in their scale and sophistication in framing co-equal goals for the Delta," Clark said.
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