EP 1165-2-1
30 Jul 99
seasonal passenger craft, yachts, house boats, fishing boats, motor
boats and other similar watercraft, whether or not operated for hire."
However, "waterborne commerce" is not exactly the same thing as
"commercial navigation" for priority output purposes.
b. NED Benefits. NED benefits are expressed in monetary
units. The conceptual basis for determining those values is
willingness to pay. Generally the costs of and return from commercial
activities are readily quantifiable. The benefits of commercial
navigation projects are (1) reduced cost of transportation through use
of vessels (modal shift), safer or more efficient operation of vessels
and use of larger and more efficient vessels (channel or lock
improvements), and use of new or alternate vessel routes (new channels
or port shift); (2) reduced cost or increased net return to producers
from new sources or markets (shift of origin or destination); and (3)
increased production through new or induced commodity movements
(industrial production) or greater production opportunity (commercial
fishing and offshore minerals). The benefits of recreation navigation
projects are reduced cost of recreation (usually delay cost or boat
damage cost avoided) and willingness to pay for recreation
experiences.
c. NED Costs. The requirement is to identify all costs, with
and without the considered navigation improvements. The facilities to
accommodate and service vessels or load and unload cargo or passengers
usually required to achieve the navigation benefits are a non-Federal
responsibility. Their cost is an associated cost that must be
accounted for in the evaluation. The preferred accounting is as an
NED cost. Associated costs may be handled by the self-liquidating
cost concept. That is, facility costs are assumed liquidated by user
charges. The concept may be used only if estimated benefits are net
of the associated costs. Associated costs must always be shown.
Pursuant to WRDA 1986, Federal user charges will be assessed for use
of certain waterways (fuel tax) and harbors (harbor maintenance tax),
and project sponsors may assess local user fees to recover their cost
share. These fees do not reduce the NED cost of the project.
d. Economic Justification. Economic justification is
determined by comparison of NED benefits and costs. In addition to
NED, the P&G specifies three other accounts for evaluating effects,
one of which, regional economic development (RED), is also measured in
economic terms. Some or all benefits specific to a region may be at
the expense of other regions, and these are recognized as transfers.
Such transfers result in no additional benefits contributory to
project justification from a national (NED) perspective.
e. Net NED Benefits. Reports should include information and
data for a number of alternative plans and plan scales sufficient to
satisfactorily define both the upper and lower portions of the net
benefits curve. So that the relationship between costs and benefits
is evident, either the total benefits and total cost curves or the
incremental benefits and incremental cost curves, shall be displayed.
The relationship between costs and benefits thus determined and
displayed serves as the basis for comparisons of the efficiencies of
various plans, including the locally preferred plan if it differs from
the Federally supportable plan (NED plan or granted exception to the
NED plan).
f.
Sensitivity and Risk Analyses.
The P&G contain a general
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