Financial and Economic Evaluation of Projects for Wastewater Used in Irrigation and Industry

Financial and economic analysis of investment constitute an essential part of the decision making process. In this paper the feasibility of executing wastewater projects has been assessed using techniques of Engineering Economics including economic and financial analyses. Primarily, the economic and financial assessments of a specific project in Kalateh-Khij city, with a population of five thousand, were carried out based on the information of the city and certain indicators. Regardless to the external effects, the profitability of the project was examined for the private sector’s investment. Since the Net Present Values for two possible scenarios of using sewage in the agriculture and/or industry sections with the lowest expected rate of interest (5%) were negative, the project was not economically feasible. Furthermore, the results showed that the treatment of wastewater for using in irrigation is more economical than in industry. Since the element of uncertainty in the incidence of costs and benefits makes the investors and decision makers doubtful in using C&B analysis, the sensitivity analysis was applied by separately changing different discount rates, unfavorable changes (favorable) of incomes and expenses; and fixed costs (decrease) so as to examine the effective factors in the economization of the projects. The results showed that executing this project for larger and more populated cities will be more economical according to decrease in the capital costs per unit.