Underestimation of programme costs
Other Names: Underestimated project disadvantages
Incidence: In large-scale water projects cost-benefit ratios are often manipulated to give a favourable economic assessment of the projects. Sponsoring agencies underestimate expected costs for annual operation and maintenance of the projects, reservoir-flooding of productive land, loss of outdoor recreation sites, environmental costs of irrigation. Besides, they ignore the costs of decommissioning, fail to account for the energy costs of building, for example a dam, and use unrealistically low discount rates of future value of the currency.
Problem Type: F: Fuzzy exceptional problems
Date of last update 01.01.2000 – 00:00 CET