Dominance of the Internal Rate of Return as a Planning Criteria and the Treatment of O and M Costs in Feasibility Studies

摘要

A study has recently been made of the socio-economic and institutional problems reported in 50 recent evaluations of irrigation projects in developing countries, funded by various agencies, with the objective of making recommendations for improving the study of these matters during the preparation and planning phases. In five cases the original feasibility or appraisal documents were also examined. During the study the current importance attached to a high Economic Internal Rate of Return (EIRR) as a deciding factor for project funding emerged as in practice a constraint on institutional and technical design, on the phasing of implementation, and on the lack of adequate consideration given to either farmer incomes or to the income and expenditure of the project authority or other operating organization.