RESOURCES COST,RESETTLEMENT COST,AND POLITICAL RESTRAINTS IN THE CHOICE OF DAM LOCATIONS

This study evaluates three alternatives locations for building a fresh water dam in the Yesilirmak valley of North Cyprus. Each of the three sites has different investment costs, storage capacities, 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 constrains 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-maker rational political and economic choices in such situations.