Cost-benefit analysis, investments, and public-private partnerships. The La Muralla Dam Case

Abstract

This is part of a case series. In this second part of the La Muralla Dam case, a methodology is used to carry out a cost-benefit analysis to help support decision-making regarding whether the infrastructure project should be carried out or not. This proposal is particularly relevant in a lower-income country with limited access to data on the losses experienced due to destructive natural phenomena. This case focuses on the factors that impact the region where the project will be carried out and also the economic implications the project will have for the country. Using information from these two phases, it is possible to estimate the costs and benefits of the La Muralla project. As mentioned, access to data is limited, and so it has been necessary to create a methodology using information about Omagua and other, similar countries that have already started building similar infrastructure, as their results can help quantify the potential impacts of the La Muralla project. As result of discussion, it is expected that students will be more familiarized with the factors that can be taken into consideration for the cost-benefit analysis. Additionally, students will have had the chance to the calculate the cost-benefit analysis and will be able to provide a concrete response regarding the viability of the La Muralla project.