Financial Analysis of the Qazvin Plain Water Supply Project from Shahroud River and Assessing its Potential Economic Impacts in Agricultural Sub-division of the Destination Basin

In recent years, inter-basin water transfer projects are one of the measures taken into consideration for the problem of water shortage in some parts of the country. Providing the required water resources for the downstream areas using such projects can affect the economy of the destination basin. In this study, the economic and social impacts on the destination basin are evaluated for the water supply project conveying water from Shahroud River to Qazvin plain. To achieve this goal, first using the cost-benefit ratio (CBR) method, the project was evaluated in terms of economical and financial profitability. Then, using the positive mathematical programming (PMP) method, the effects and consequences of this plan in the destination basin were analyzed. Data and information required for this study are related to crop years 2016-2017. The proposed planning model was solved in GAMS software. The results showed that the transfer of water from Shahrood river to Qazvin plain is economicaly feasible for discount rates of 5 to 20 percent. The economic value of each cubic meter of irrigation water is estimated as 3720 rials. The results of the economic model showed that after implementation of the water supply plan, the area under cultivation for profitable products such as sugar beet, tomatoes, corn, and alfalfa is increased and cultivated area of irrigated wheat, irrigated barley and canola is reduced. Also the total farmers’ gross profit increases is estimated as 6.34 to 11.5 percent after the implementation of the water transfer plan. Finally, considering the positive effects of implementing the water supply project, irrigation water pricing reform is recommended to the authorities and institutions in charge and development and continuation of cultivation of profitable products is recommended to farmers.