Craic On

Cost Benefit Analysis

When I was head of a computer department at a company, when IT projects were wanted, we first of all had to do a Cost Benefit Analysis before we got approval for funds for the project.

We had to show that the financial benefits for the company were higher than the costs – otherwise it wasn’t worthwhile doing it. If we couldn’t prove that the project didn’t get done.

It looks like, when the Council decided in 1995 that it was cheaper to have the Sewage Treatment Plant at Carnagarve rather than outside the estuary they only did half the work. They only looked at the difference in the cost of installing it – and it was around €400,000 cheaper to put it at Carnagarve rather than outside the estuary if my memory serves me right.

They didn’t go the whole hog and look at both sides of the equation. A survey has shown that the very building of the pipeline will affect the seagrass in that area on which fish and shellfish feed. According to a report there are 19 official areas in Ireland where seagrass grows and they are virtually all protected areas. Maybe because it is on land claimed by the British Lough Foyle is not included in that but the seagrass has now been shown to be there in 4 areas of the Foyle including at Carnagarve.

It is virtually gone at Moville pier where the raw sewage comes out. It is damaged at Carnagarve where the raw sewage has been shown to pass but it is fine in the other areas in the Foyle.

Benefits

For the Cost Benefit Analysis you couldn’t count the benefits to the area from raw sewage no longer being pumped out at Moville pier as that would be stopped by both solutions.

You would have to look at the potential damage to the other seagrass areas in the Foyle including that at Carnagarve and also the potential for Carnagarve’s seagrass quality to be improved if there was no raw sewage passing it and no treated sewage being pumped out there.

If it improved to the levels of the other seagrass areas in the area (and why shouldn’t it?) that would mean increased income for local fisherman and shellfishers which would mean an increase in the money coming to the Government in taxation and perhaps a drop in unemployment benefit.

Information

How much would this come to and where would we get this information? There must be other sea loughs and bays where they have managed to repair damaged seagrass areas and they may be able to say how much more activity there was for fishermen and for shellfishermen. Perhaps Lough Ryan in the UK could help. From that can be derived the increased income that would be accrued if the Carnagarve seagrass area was restored and the other areas not damaged.

If there were more fish in the lough that might also attract more tourists and more fishermen who would buy licences. This could all be assessed and the financial benefits estimated.

Estimate

Let’s say that the cost saving of building the Plant at Carnagarve was €400,000. This is a one-off cost and there would be no additional savings over the years one would presume (or maybe there would be). However, if there are it could all be thrown into the calculation.

Let’s say that we look at this over a period of 20 years and say that any Benefits must accrue over 20 years that would be greater than the €400,000 saving from the building of the pipeline at Carnagarve.

Therefore if ,

a) the cost in terms of loss fishing and shellfish beds caused by the pipeline and the damage from the treated sewage
and
b) the lost financial opportunity from a seagrass area that was repaired

came to more than €20,000 a year, then the Cost Benefit Analysis would show that the difference in cost of locating the Plant outside the area would pay for itself in 20 years or less and it would that it is actually cheaper to site it outside the estuary.

To that should be added lost tourism and angling income from damaged seagrass beds and also any potential extra income if the bed was repaired.

Pay For Itself

My instinct is that a proper Cost Benefit Analysis would show that it would pay for itself in a lot less than 20 years.

Once that analysis is done I would bet that the main plank of the argument for situating it at Carnagarve, i.e. the cost savings, despite all its disadvantages, would be blown out of the water.

One wonders what the cost to the area has been since the major increase in raw sewage entering the Foyle. One knows that there used to be a lot more fish and shellfish in the Foyle than there is now and it used to provide an income for a lot more people.

I’m sure there are other factors but pumping raw sewage into a river and lough and then proposing to build a pipeline through a seagrass-filled seabed and pump warm sewage water treated by chemicals into the seagrass bed would certainly not enhance fish stocks.

It might be an idea to write down all the factors like lost income, lost tax, increased unemployment benefit, lost (or increased) tourism etc. and then look for ways to quantify each of these. You would then set the total beside the extra cost of siting the pump outside the estuary and then see which figure was higher.