fit cannot exceed the reduction in transportation 

 charges achieved by the project. 



(d) New movement benefit. This benefit applies if 

 a commodity or additional quantities of a commod- 

 ity would be transported only because of lowered 

 transportation charge with the project. The quanti- 

 ties are limited to increases in production and con- 

 sumption resulting from lower transportation costs. 

 An increase in waterway shipments resulting from a 

 shift in origin or destination is not included. The 

 new movement benefit is defined as the increase in 

 producer and consmer surplus; practically, it can be 

 measured as the delivered price of the commodity 

 less all associated economic costs, including all of 

 the costs of barge transportation other than those 

 of the navigation project. This benefit, like the pre- 

 ceding one, cannot exceed the reduction in trans- 

 portation costs achieved by the project. 



(e) Use of rates for benefit measurement. It is 

 currently more difficult to accurately compute the 

 long-run marginal costs of particular rail movements 

 on the basis of cost estimation studies than to de- 

 termine the rates at which railroad traffic actually 

 moves. In competitive markets, rates (prices) corre- 

 spond to marginal cost, and, given market stability, 

 prices will settle at long-run marginal costs. More- 

 over, the rates actually charged determine the dis- 

 tribution of traffic among modes. For these rea- 

 sons, rates will be used to measure shift of mode 

 benefits. Section 7a of the Department of Transpor- 

 tation (DOT) Act of 1966 (Pub. L. 89-670) requires 

 the use of prevailing rates, as described in 2.6.9(b). 

 In the case of new watenways, this rate may or may 

 not represent the best estimate of long-run margin- 

 al costs. In the case of existing waterways, prevail- 

 ing competitive similar rates are the best available 

 approximation of long-run marginal costs. 



2.6.3 Planning setting. 



(a) Wittiout-project condition. The without-project 

 condition is the most likely condition expected to 

 exist in the future in the absence of the navigation 

 project or any change in law or public policy. The 

 without-project condition includes any practice likely 

 to be adopted in the private sector under existing 

 law and policy, as well as actions that are part of 

 broader private and public planning to alleviate 

 transportation problems. The following specific as- 

 sumptions are part of the projected without-project 

 condition: 



(1) Assume that all reasonably expected non- 

 structural practices within the discretion of the op- 

 erating agency, including helper boats and lock op- 

 erating policies, are implemented at the appropriate 

 time. Substantial analysis is required to determine 

 the best combination of nonstructural measures to 



ensure the most effective use of an existing water- 

 way system over time. This analysis should be doc- 

 umented in project reports to assure the reviewer 

 that the best use of existing facilities will be made 

 in the without-project condition and that the bene- 

 fits of alternative with-project conditions are cor- 

 rectly stated. The criteria for the best utilization of 

 the system are overall public interest concerns, in- 

 cluding economic efficiency, safety and environ- 

 mental impact. 



(2) User charges and/or taxes required by law 

 are part of the without-project condition. Proposed 

 or possible fees, charges, or taxes are not part of 

 the without-project condition but should be consid- 

 ered as part of any nonstructural alternatives in the 

 with-project condition. 



(3) The without-project condition assumes that 

 normal operation and maintenance will be per- 

 formed on the waterway system over the period of 

 analysis. 



(4) In projecting traffic movements on other 

 modes (railroad, highway, pipeline, or other), the 

 without-project condition normally assumes that the 

 alternative modes have sufficient capacity to move 

 traffic at current rates unless there is specific evi- 

 dence to the contrary. 



(5) Alternative modes should be analyzed as a 

 basis for identifying the most likely route by which 

 commodities will be transported in the future in the 

 absence of waterway improvement. 



(6) The without-project condition normally as- 

 sumes that only watenway investments currently in 

 place or under construction are in place over the 

 period of analysis. 



(b) Witti-project condition. The with-project condi- 

 tion is the most likely condition expected to exist in 

 the future if a project is undertaken. The same as- 

 sumptions as for without-project condition underlie 

 the with-project condition. The following discussion 

 relates to the alternatives considered under the 

 with-project condition. 



(1) Management of demand by the use of con- 

 gestion or lockage fees is a nonstructural alterna- 

 tive, which alone or in combination with structural 

 devices may produce an economic optimum in a 

 congested waterway. Influencing marginal waterway 

 users through a congestion fee can increase the 

 net benefits of a waterway. Evaluate alternatives 

 that influence demand on the same basis as 

 supply-increasing (structural) alternatives. 



(2) Additional nonstructural measures not within 

 the current purview of the operating agency may be 

 considered "supply managment" measures. One 

 example is traffic management. These supply-in- 

 creasing (nonstructural) measures can be used 



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