the NED cost of using such resources for project 

 purposes consistent with their committed uses on 

 the surrogate value of the public services provided 

 by the resources. For example, if State-owned land 

 committed to recreation use is to be used for pro- 

 ject recreation development, its NED cost is not the 

 market value of the land, but the value of the recre- 

 ation services that would be provided by the land 

 without the project. Public domain lands not com- 

 mitted to specific uses should be valued at the 

 market value of comparable private land or a surro- 

 gate use value, or a combination if there are com- 

 plementary uses. 



(i) Operation, maintenance, and replacement 

 costs. These costs represent the current value of 

 materials, equipment, services, and facilities 

 needed to operate the project and make repairs 

 and replacements necessary to maintain project 

 measures in sound operating condition during the 

 period of analysis. They include salaries of operat- 

 ing personnel; the cost of repairs, replacements, or 

 additions; and an appropriate charge for inspection, 

 engineering, supervision, custodial services, and 

 general overhead. When operation, maintenance, 

 or replacement will be performed by contract, the 

 cost should include an allowance for contingencies 

 and the costs of survey, planning design, and ad- 

 ministrative services. Base these costs on actual 

 current costs incurred for carrying out these activi- 

 ties for similar projects and project measures. 

 When the project is an addition to or extension of 

 an existing project for which the costs and benefits 

 are not included or otherwise involved in the project 

 analysis, include only the additional cost of oper- 

 ation, maintenance, or replacement necessitated by 

 the addition or extension to the existing project. Ad- 

 justments can be made when appropriate to reflect 

 circumstances special to the project under consid- 

 eration. 



2.12.6 Evaluation procedure: Associated costs. 



Associated costs are the costs of measures 

 needed over and above project measures to 

 achieve the benefits claimed during the period of 

 analysis. For example, associated costs include the 

 cost of irrigation water supply laterals, if they are 

 not accounted for in the benefit estimate. Base as- 

 sociated costs on the current market pnces of 

 goods and services required for the installation of 

 measures needed over and above project meas- 

 ures. 



2.12.7 Evaluation procedure: Other direct 

 costs. 



(a) These are the costs of resources directly re- 

 quired for a project or plan, but for which no imple- 

 mentation outlays are made. Consequently, they 

 are included in the economic costs of a plan but 

 not in the financial costs. These costs may be im- 

 portant for both structural and nonstructural plans. 

 For example, a zoning plan to preserve floodplain 

 values by restricting development would have as a 

 cost the value of with-project development opportu- 

 nities foregone. A plan that responds to demand 

 growth by reallocating existing outputs from low 

 value uses to high value uses through pricing 

 mechanisms (i.e., raising the price of existing out- 

 puts) would have as its major cost the value of the 

 outputs to the users who forego its use as a result 

 of its higher price. On the other hand, a structural 

 project may displace recreation use at the project 

 site. Whenever possible, compute these costs 

 using the procedure set forth in this manual for 

 computing benefits. If these costs are not quanti- 

 fied, they should be otherwise identified. 



(b) Other direct costs also include uncompensat- 

 ed NED losses caused by the installation, oper- 

 ation, maintenance, or replacement of project or 

 plan measures. All uncompensated net losses in 

 economic outputs (not transfers) that can be quan- 

 tified shall be considered project NED costs. The 

 evaluation of such costs requires an analysis of 

 project effects both within and outside the project 

 area. 



(c) Examples of other direct costs include in- 

 creased downstream flood damages caused by 

 channel modifications, dikes, or the drainage of 

 wetlands; increased water supply treatment costs 

 caused by irrigation return flows; erosion of land 

 along streambanks caused by dams that prevent 

 the replenishment of bedload material; loss of land 

 and water recreation values through channel modi- 

 fications, reduced instream flow due to consump- 

 tive use of water by irrigated agnculture, or inunda- 

 tion by reservoirs; increased transportation costs 

 caused by rerouting traffic around a reservoir; new 

 or increased vector control costs caused by the 

 creation of wetlands; and decreased output or in- 

 creased cost per unit of output of private firms 

 caused by project-induced decreases in raw materi- 

 als. When applicable, compute such costs using 

 the procedures for computing benefits contained in 

 this chapter. Some costs, such as increased water 

 supply treatment costs, may be computed on the 

 basis of increased costs to resource users. 



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