Report No FR0449

APRIL 1994

I BENEFITS

The cost estimating guidelines set out in this report will enable planners within the water industry to estimate the cost of investment required to meet given improvements in river water quality. The guidelines establish a consistent and transparent met hodology for estimating costs which can be combined with the output of the Interim Benefit Assessment Manual in order to undertake a Cost Benefit Analysis (CBA).

II OBJECTIVE

The objective of the study is to develop a set of guidelines for broadscale costing of the sewer and wastewater treatment works upgrading needed to improve the water quality for a particular stretch of river. In addition the guidelines had to be compatible with the methodology for estimating the benefits arising from improvements in river water quality that was being developed at the same time by the Foundation for Water Research (FWR).

III REASONS

The implementation of Statutory Water Quality Objectives (SWQOs) will initially be cost neutral, but will ultimately lead to improvements in river water quality to support enhanced beneficial uses. The Secretaries of State for the Environment and for Wales have indicated that this will entail the proper assessment of cost and benefits. Thus the development of a CBA management tool will enable regulators and operators:

• to ensure that new environmental obligations are based on a proper consideration of the associated costs and benefits; and
  
• to ensure that once standards have been set, schemes can be prioritised on economic grounds.

Hence there was a need for a methodology and guidelines to calculate the benefits and costs associated with improvements in river water quality.

IV CONCLUSIONS

A set of guidelines for providing broadscale cost estimates of the sewer and wastewater treatment works upgrading requirements needed to improve the fishery ecosystem for a particular length of river has been developed.

The guidelines address three separate scenarios: a single wastewater treatment works with no significant intermittent discharges, several wastewater treatment works with no significant intermittent discharges and a single wastewater treatment works with significant intermittent discharges. The recommended approach for each of the cases has been illustrated through an example. In addition, cost functions have been developed.

V RECOMMENDATIONS

The methodology presented in this report to determine capital costs associated with upgrading sewerage and wastewater treatment should be trialled in conjunction with the Interim Benefit Assessment Manual. This will allow testing of the two methodologies to estimate the costs and benefits, respectively, of improvements in river water quality.

The trial should be targetted at three specific applications:

• single wastewater treatment works with no significant intermittent discharges;
  
• several wastewater treatment works with no significant intermittent discharges;
  
• single wastewater treatment works with significant intermittent discharges.

The trialling will allow practitioners to assess the potential application of Cost Benefit Analysis to schemes relating to river water quality in general and as a means for setting Statutory Water Quality Objectives in particular.

VI RESUME OF CONTENTS

Section 1 provides an introduction to the report including a more detailed description of the background to the work and a definition of the scope of the work. The recommended approach for estimating costs is described in Section 2. The guidelines are then applied to three cases in Section 3 to illustrate how the guidelines would be applied. Section 4 provides a brief introduction to CBA and establishes the link with the Interim Benefit Assessment Manual. The recommendations and conclusions are made in Sections 5 and 6 respectively.

Copies of the report are available from FWR, price £25.00, less 20% to FWR Members.