Ch. 7— The Effects of ttie 404 Program • 147 



ficient or less costly to develop than those original- 

 ly proposed. Average savings were estimated to be 

 15 percent of total project costs. (However, in a 

 table showing calculations, savings were estimated 

 to be 15 percent of "site development costs," which 

 in turn were thought to be 25 percent of the total 

 project cost.) Using an estimated total financial cost 

 of over $217 billion for all projects and an amorti- 

 zation factor of 10 percent for 25 years for the "so- 

 cial value" of projects, IWR estimated total benefits 

 from technology tranfer to range from $135.5 mil- 

 lion to $271 million. 9 



Many projects undoubtedly experience benefits. 

 However, the IWR estimate appears to be over- 

 stated gready. The methodology used for the IWR 

 report has serious flaws (7), and does not corres- 

 pond to the responses received by OTA from Corps 

 districts. 



The OTA survey of Corps districts asked re- 

 spondents to estimate the proportion of permitted 

 projects that have benefited from technology trans- 

 fer, and the average percentage of savings in terms 

 of project development costs. Most districts do not 

 keep any records on technology benefits. As stated 

 by one, "As project costs are seldom, if ever, pro- 

 vided with permit applications, it is impossible to 

 estimate savings in project costs without loss of ben- 

 efits."* Thus, answers to the survey questions were 

 estimates rather than calculations from data. 



As with all aspects of the 404 program, districts 

 vary tremendously in how they perceive technology 

 transfer. Owing to lack of data, 14 districts did not 

 make any estimates of technology transfer benefits. 

 Seven districts said that the program did not result 

 in savings to projects. Five of this latter group 

 thought that costs were increased rather than de- 

 creased to applicants. Four districts said that "few" 

 or "very few" projects experienced savings. One 

 district said that "a number" of modifications to 

 projects resulted in "potential savings." Finally, 

 1 1 districts gave numerical estimates of technol- 

 ogy-tranfer benefits. 



Estimates of the percentage of projects gaining 

 savings from technology transfer and the percent- 

 age of those savings, in order of magnitude of esti- 

 mated savings, are shown in table 24. 



'Institute for Water Resources, op. cit., pp. 135-36. 

 •Response from the Corps' Detroit District. 



Table 24.— Estimated Effects of Technology Transfer 

 on Financial Costs 



District Percentage of projects Percentage of savin gs 



1 1 No estimate 



2 5 No estimate 



3 5 10 



4 5 20 



5 5-10 5-10 



6 10 5 



7 10-15 5-10 



8 15-20 10-20 



9 20 10 



10 25 20-30 



11 40-45 20-30 



SOLIRCE: Data from Corps district responses to OTA's questionnaire. 



While the means of these estimates ( 1 3 to 1 5 per- 

 cent of permitted projects benefiting; 12- to 16-per- 

 cent savings) are more or less in the range given 

 by IWR, the view of most Corps districts is that 

 technology transfer benefits are infrequent or can- 

 not be documented. As stated by several districts 

 in response to the survey, the goal of permit mod- 

 ifications is not to reduce costs to applicants but 

 to reduce or avoid environmental impacts of proj- 

 ects on wetlands. 



OTA also asked industry associations to estimate 

 technology transfer benefits to their members. The 

 associations involved generally have strong objec- 

 tions to aspects of the 404 program and may not 

 be representative of the experience of other in- 

 dustries with respect to such benefits. 



Of the eight associations or groups of firms re- 

 sponding specifically to this question, seven said 

 that such benefits do not accrue. One association 

 said that its members benefited from Corps advice 

 on water-related projects (e.g., building of struc- 

 tures in waterways and the design of dams and im- 

 poundments). The percentage of projects that were 

 estimated to experience such benefits was less than 

 5 percent; the amount of savings less than 1 per- 

 cent of total project costs.* 



General Objections to the Program 

 by Regulated Sectors 



The major concern of regulated sectors about the 

 404 program are the costs suffered as a result of 

 the program processing, delays, modifications, and 



•Response from the American Mining Congress. 



