Allocating the costs of multi-purpose water resource development: a case study of Chi-Chi Weir in Taiwan

Most multi-purpose water resources have been planned and constructed by governments in Taiwan to meet the water demands of different users. However, economic and solvency differences among parties using water create conflicts regarding the reasonable and equitable allocation of investment and operational costs. The Chi-Chi Weir in Nantou County, which was completed in 2002, meets the high water demand of residents and the needs of industrial growth in central Taiwan. Thus, multi-purpose water reservoirs are designed to serve agriculture, the public and industry. Three analytical methods, the quantity-based method, marginal cost method, and separable cost remaining benefit method (SCRB), are employed to compare the cost allocation for different parties using water. The quantity-based method indicates that proportional costs allocated to agriculture, the public, industry and new irrigated areas are 88.02, 3.63, 7.86, and 0.49%, respectively. Via the marginal cost method, the proportional costs allocated to agriculture, the public, hydropower, industry and new irrigated areas are 68.44, 2.51, 28.71, and 0.34%, respectively. The marginal cost price of water is NT$ 2.97 ton−1; industrial use has the highest price. Based on the SCRB method, the proportional costs allocated to agriculture, the public, hydropower, and new irrigated areas are 18.2, 22.2, 51.8, 4.8, and 2.9%, respectively.