COST-EFFECTIVENESS OF INTERVENTION

Project costs during phase one are estimated at approximately US$ 7m. The major costs during this phase were construction of the weir and pipe that takes water to the valley floor, construction of the irrigation pipe network, land reclamation and development and purchase of farm machinery and equipment. Since the completion of phase one, no major capital investment has been made by the project. The irrigation system is gravity-fed and requires minimum maintenance. Cost-benefit analysis shows that the benefits created by the project far exceed the costs incurred. When costs and benefits for the period 1987-99 are compared, the projects yields and internal rate of return (IRR) equal to 24 percent which is an impressive result. Clearly, despite the initial high capital costs, the project is cost-effective when returns are considered and the fact minimum the irrigation system requires minimum maintenance.