DDP 750. Hasan Ali Bicak, Glenn P. Jenkins and Ali Ozdemirag. "Resource Costs, Resettlement Costs, and Political Constraints in the Choice of Dam Locations." February 2000. 23 pp.

This study evaluates three alternative locations for building a fresh water dam in the Yesilirmak valley of North Cyprus. Each of the three sites has different investment costs, storage capabilities, and socio-political repercussions.

An integrated financial-economic and stakeholder analysis is conducted in order to evaluate the trade-offs between these three potential dam locations. The opportunity cost of the fertile land that would be covered by the third location is compared with the economic rents associated with the additional water which would be provided by a dam at this location. The economic cost of not being able to build at the first site because of international political constraints is also estimated. These kinds of trade-offs have in recent years characterized much of the world-wide debate surrounding the construction of electricity and irrigation dams. This paper demonstrates how an integrated analysis can provide the inputs needed by decision-makers to make rational political and economic choices in such situations.

Keywords: North Cyprus, breakeven price, dam, potable water, resettlement, stakeholder impacts

JEL Codes: H43, H54, Q25

Hasan Ali Bicak is the Chairman of the Department of Banking and Finance at the Eastern Mediterranean University in North Cyprus. Comments on this paper may be addressed to bicak@benet.emu.edu.tr

Glenn P. Jenkins is an Institute Fellow at the Harvard Institute for International Development, Harvard University and the Director of the Program on Investment Appraisal and Management at HIID.

Ali Ozdemirag is a Project Assistant at the Harvard Institute for International Development, Harvard University.