We then have the annual expected area inundated
= 324.93+ [0.305 X 257.03] = 403.38 square miles(The sample mean x being used to estimate the population mean). On the assumptions
made about the damage per unit are in-undated, the value of crops lost per year is Rs.82
million.
The life of the project was assumed to be one hundred years, which is generally used for
the evaluation of similar projects in India. The present value of an annuity of Rs.82
million per year for a hundred years at a 10 per cent rate of discount is Rs.820 million
approximately.1. This can be regarded as an estimate of the damage to agricultural
production due to floods in the Damodar Valley.
Apart from the damage to agricultural output, damage to property such as railway lines or
roads on the left bank of the Damodar River may also occur if the peak flow is
sufficiently high. The expected level of such damage can then be computed from our
estimated probability distribution together with the relevant damage function. Similar
considerations apply to the damage due to loss of life, although special difficulties are
involved in evaluating such damage.
The Damodar Valley Project cannot at present provide for complete flood protection.
Hence, to compute the benefits of the extent of flood protection achieved by the project,
one could follow the method indicated in section 10.4 by estimating the functions? (x)
representing the reservoir operation policies in various ranges of values of x. The
benefits so computed could then be compared with the relevant costs.
A Summary
We shall conclude by pointing out some of the more important limitations of the method
of evaluating flood-control benefits described in this chapter.
Firstly, the estimation of the flood-damage function involves a number of serious
difficulties. Thus, the relationship between flood discharge and area inundated in this
region is likely to show an upward shift over time owing to the building of new structures
and the silting of the river bed in the lower valley. This has in fact been happening in the
deltaic regions of West Bengal, with the result that a peak flow of a given intensity now
tends to produce a greater extent of inundation than in the past.
Again, the damage per unit area inundated tends to increase over time because of
economic development. To the extent that such an increase in the damage factor is due to
autonomous economic development, the estimation procedure may be corrected by
appropriate statistical analysis (e.g. by taking trend factors into^1 within the normal range
of rates of discount it actually makes very little difference whether the lifetime sued is
100 years or 150 years or infinity. 10 per cent has been widely sued as an accounting rate