tag:blogger.com,1999:blog-8236405782975490260.post5721319758237733726..comments2024-03-20T22:55:32.772-07:00Comments on Valley Economy: A new term for subsidyJeffhttp://www.blogger.com/profile/10344751623916759400noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8236405782975490260.post-20173798330667559632011-02-11T11:11:59.407-08:002011-02-11T11:11:59.407-08:00Good points, and two sides of the same coin is ind...Good points, and two sides of the same coin is indeed the case. See the next to last paragraph.<br /><br />The point of this post is that we can expect the financing proposals to include all sorts of hidden subsidies that are rationalized in very creative ways. <br /><br />Just wait.Jeffhttps://www.blogger.com/profile/10344751623916759400noreply@blogger.comtag:blogger.com,1999:blog-8236405782975490260.post-68224614509185230312011-02-11T09:56:08.860-08:002011-02-11T09:56:08.860-08:00Jeff, great column as usual, but I am inclined to ...Jeff, great column as usual, but I am inclined to agree with our mutual friend OtPR. I would put trust and governance slightly ahead of finance. If there was more trust which led to an agrement on governance, like for instance a new JPA based on the Delta Counties Coalition, to construct and operate any new conveyance facilities delivering water to the CVP and the SVP on agreed terms, and if the economics of the higher cost of water deliveries could be accomodated, then raising the finance either in the form of municipal bonds or as a private investment from global banks specializing in infrastructure should be possible - maybe not right at this moment, but within a year or two. The hitch is whether agricultural water users can adjust to a higher cost of water in return for more reliable supply. It appeared that for a project cost of up to $12m, the agricultural water users thought they could adjust, as Westlands and SLDMWA have pulled out of BDCP, not because of the cost, but because they are not being offered what in their view are sufficiently reliable supplies.<br />But maybe these are just two sides of the same coin? Just as finance and economics are two sides of the same coin? Regardless, as I think you have argued before, a proper economic analysis is badly needed. But then one of the questions is do do spread the new costs over only some increment in the delivered amount of water or over the total deliveries. I would, I think, argue for the latter as without a solution to the current problems exports will potentially be completely shut down as a result of the lack of incidental take permits. Any new costs are necessary to maintain exports above a zero base. <br /><br />Robert Pyke, a simple dirt engineer from Australia, but one who is connected to the folks that wrote the report that led to water rights and pricing reform in Australia.Robert Pykehttps://www.blogger.com/profile/13278924680026897931noreply@blogger.comtag:blogger.com,1999:blog-8236405782975490260.post-73337880348627806462011-02-10T21:58:45.016-08:002011-02-10T21:58:45.016-08:00Trust and governance are still problems, but I don...Trust and governance are still problems, but I don't think they are the major obstacle to building the project.Jeffhttps://www.blogger.com/profile/10344751623916759400noreply@blogger.comtag:blogger.com,1999:blog-8236405782975490260.post-33337047185399687172011-02-10T16:09:03.891-08:002011-02-10T16:09:03.891-08:00The roadblock isn't governance, it's finan...<i>The roadblock isn't governance, it's finance.</i><br /><br />You are slowly convincing me of this, although the trust and governance problems haven't been resolved.<br /><br />OtPRAnonymousnoreply@blogger.com