de 106 Tabla 98: Promedio mensual de casos con pruebas positivas de Hepatitis C y promedio de

It is beyond the scope of this paper to describe this process of consensus-seeking in great detail. One method would be for interested parties to first receive a fairly comprehensive presentation of the results of the study of alternatives, then split up into relatively small specialist working groups to discuss and give ratings to each of the project alternatives with respect to, say, economy, environment, impact on local population, etc. The expert group on environ- ment, for example, would first rank and then assign weights to possibly numerous environmental factors to be considered. These weights would be uniformly applied to each of the competing alternatives. Then the individual members of the working group would be asked to give scores to the various factors under consideration. The scores would be multiplied by weights and then summed to arrive at an overall rat- ing for environmental issues for each alternative.

The working groups would also be asked to verbal- ly describe their main findings. Thereafter, the par- ties would jointly look at the trade-offs between the overall ratings of major disciplines. Inferior (Pareto sub-optimal) and other unacceptable solutions would be discarded (e.g., a hydropower option that would produce power at twice the cost of an alternative ther- mal power plant). The remaining range of acceptable choices would be discussed until most parties can agree on the alternative proposed for implementation. The entire process should be controlled by an inde- pendent and unbiased facilitator who however should be able to broadly understand the type of project or projects under discussion.

This would be a very democratic approach but may be rather novel and even considered unaccept- able in some countries, since decision-making is car- ried out at an autocratic political level without direct consultation with the people affected. Thus, there may be limits as to how open this kind of workshop can be made in practice. The development banks should nevertheless pursue a policy that ensures maximum participation of project stakeholders, and if this is altogether rejected by a particular government, then the international funding agencies should refrain from becoming involved.

The major difference from previous planning practice would be the attempt to reach a consensus of all par- ties concerned at as early a stage as possible, thus avoiding last-minute surprises after years of develop-

ment expenditures, as has happened with several large dam projects in the recent past.

THE ROLE OF PRIVATE DEVELOPERS

With few exceptions, the development, ownership and operation of large dam projects in the past has been the responsibility of governments and national utilities. In industrialized countries such projects were financed from internal sources or balance sheet borrowings; in developing countries concessionary capital from multilateral and bilateral agencies was used.

In the last ten years, irrevocable changes have occurred in this regard. Governments everywhere are experiencing greater difficulty in raising finance for large infrastructure projects. This is particularly true of power sector investments which are increas- ingly being perceived as commercial. In developing countries there has been an accompanying shift in concessionary lending priorities from physical infra- structure to social infrastructure. With an accelerat- ing demand for power-sector investment capital, the private sector has been encouraged to fill the void through private-sector financing and ownership.

In summary, the increasing role of private sector development leads to:

■Emphasis on financial project efficiency, resulting in reduced availability of time and funds for planning, investigation and construction work, and also an emphasis on cost-cutting operation and maintenance procedures;

■Externalization of the indirect costs associat- ed with the project to the maximum extent possi- ble;

■Levying of water (or power) tariffs that guar- antee an attractive financial internal rate of return on the investment, with these rates typically being higher than those projects financed conventional- ly in the past from grants and concessionary loans; and

■Off-loading of as much risk as possible onto other parties, particularly onto the government.

It is clear that there is a strong need for adequate regulation and control in order to maintain standards of safety and workmanship, guarantee reasonable tar- iffs and government benefits, avoid government

exposure to undue levels of financial risk, and miti- gate environmental and social impacts.

Private developers want to limit upfront planning and preparation cost to a minimum and will try to shift as much of the costly design work to a point in time where it has secured financing of the scheme. Financial closure requires an accurate cost estimate and time plan for implementation. Public opposition could delay or even halt the implementation of a pro- ject and it is, therefore, in the interest of a developer to select a project that can be assured of broad endorsement by the public but which may not neces- sarily be the least-cost option. This can only be achieved through public consultation in the planning process as described above.

Particularly in developing countries, private devel- opers see themselves exposed to major political risks, for example, the threat of nationalization or difficul- ties in converting local currency revenues into the hard currencies needed to repay the loans. The inter- national development agencies may be willing to insure the developers against that sort of political risk. This implies that the agency’s operational direc- tives need to be followed, particularly those dealing with environmental and social concerns. The direc- tives of the international development banks also call for public participation and consultation.

The emerging planning process for schemes fund- ed by the private sector, but with involvement of the international development banks, appears to be as fol- lows:

■Formulation of a limited number of diverse pro- ject alternatives number (say, five or six, one being the no-project option);

■Rapid analysis of these alternatives, considering technical, economic, financial, environmental, social, political and risk factors;

■Election of the best overall solution through a consensus-seeking approach that involves all project stakeholders, including the people affected by the project as well as government and non-government organizations;

■Preliminary arrangements for project financing (memoranda of understanding with banks and devel- opment agencies, tariff negotiations);

■Project optimization and feasibility design,

including elaboration of environmental and social mit- igation and compensation measures;

■Financial closure (arrangement of project fund- ing and final tariff negotiations); and

■Detailed design, tendering and project construc- tion, and implementation of socioenvironmental action plans.

The change to private-sector development poses several other questions. Will governments concerned have the ability and resources to negotiate appropri- ate terms and conditions with a fair sharing of bene- fits and risks? Will developers, who are increasingly from countries without an established history of envi- ronmental protection, recognize the need for ade- quate social and environmental mitigation measures? Will there be sufficient time and investment to identi- fy key problems or fatal flaws?

It goes without saying that the projects to be devel- oped by the private sector must still be embedded into an overall water resources development plan for the country concerned and that the development of this plan similarly requires participation and consulta- tion of the public on a wide variety of issues. Here government authorities and international develop- ment agencies can and should play a major role.

3. CONFLICTS BETWEEN ECONOMIC AND FINANCIAL PLANNING

Economic planning has begun to internalize exter- nal costs in the planning process. External costs are economic costs borne by society, but are not reflect- ed in tariffs. A good example here are penalties for emissions from thermal plants, such as CO2, causing

global warming; SO₂and NO_X,causing acid rain; and PM₁₀, causing respiratory illnesses. External costs associated with large dam projects could, for exam- ple, be the loss of a major waterfall, the loss of biodi- versity in the area inundated by the reservoir, the dis- appearance of migratory fish in the river due to the construction of the dam, CH₄emissions from irrigat- ed paddy fields, which lead to increased global warm- ing, and so forth. The values that are to be attributed to the various external factors are not always clear in the absence of established procedures. It would be a big step forward if the international development banks would agree on and publish acceptable proce-

dures and typical values for the most important externali- ties.

The trend toward private- sector financing will inevitably lead to a reduced focus on economic optimality and greater focus on financial via- bility. In other words, the results of financial analysis will have greater impact on decision-making by the pri- vate sector than the results of (socio-)economic analysis. Targeted rates of return for the private sector are, for pro- jects in developing countries, often in the range of 15 to 20 percent, equivalent to 12 to 17 percent in real terms, still higher than the 10 to 12 per- cent economic discount rate (opportunity cost of capital) which the development banks

have typically used for the planning of major infra- structure projects.

High discount rates do not support sustainable development, as the long-term damages or costs asso- ciated with a project are simply discounted away. The cost of decommissioning a nuclear power plant, for example, is in the same order of magnitude as the construction cost, but accrues only after 30 to 40 years of operation. If discounted at 10 percent per annum, the decommissioning cost becomes totally irrelevant, equivalent to only a few percent of the total construction cost. Similar examples for water resources projects are the increase in soil salinity and reduction of soil fertility due to irrigation, the

increased use of fertilizers and the effect on ground- water quality in the long term.

Moreover, financial analysis considers only mone- tary cash flows, and external costs are not taken into account, which again jeopardizes sustainable develop- ment. If, for example, certain fish species become extinct in a river downstream of a major dam, there is normally no financial penalty for the project develop- er, but costs are borne by society as a whole.

In several environmental studies—for example,

those dealing with global warming—a discount rate (social preference rate) of 0 to 3 percent per year is used. A real term rate of 3 percent per annum is inci- dentally also the real term return on U.S. dollar gov- ernment bonds, which in a way should reflect the per- ceived “value of the future.”

It appears that it is high time to reconsider the dis- count rate and the inclusion of external costs. A solu- tion the authors favor, but is flatly rejected by the World Bank, would be to select and “optimize” pro- jects (not just large dams, but all projects with major socioeconomic and environmental impact) based on the social rate of preference, say 3 percent per annum, explicitly considering external costs and ben- efits. This would be a major step toward achieving long-term sustainable project concepts and would stimulate the use of water conservation measures as against the construction of oversize dam projects. Once projects have been formulated, they can be adopted by the government or private sector for implementation. As a result of the low 3 percent dis- count rate used to formulate the scheme, financial support may be needed to make it financially viable, and here the international donor community can play an important role.

Development of Large Dam Projects