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3. Wastewater Treatment in Ismailia – Egypt. In J.T. Winpenny, Values for theEnvironment: A Guide to Economic Appraisal, HMSO, 1993, based on Luken, CanalCities Water and Wastewater Phase II, USAID, 1987.Location: Ismailia is located on the shores of Lake Timsah, half way along the Suez Canal in Egypt.Population: 300,000 in 1985, estimate to grow to 500,000 by 1995.Estimation methods: focused on three categories of benefits: recreational use, recreation-related illnessand amenity.Ismailia Wastewater Treatment Plant, Estimates of Annual Benefit in million Egyptian PoundsBenefits With project Without Project DifferenceRecreational Use 16.5 3.5 13.0Recreational Illness (costs avoided) 2.1 - 2.1Amenity value(full increase inrental income for5,000-10,000 units)12.5 – 25.010-25% reductionin rental incomefor 5,000-10,000units)11.25 – 18.7 11.25 – 6.3Total 16.35 – 21.44. Mauritius Environmental Sewerage and Sanitation Project (Montagne JacquotSewerage System), Republic of Mauritius, Environmental Sewerage and SanitationProject: Project Appraisal Document, World Bank, 1998 (17289 MAR)The Study considered direct benefits to residential water consumers, benefits to higher real estatevalues and benefits from avoided loss of tourism revenue, health care costs that would occur from awater-related epidemic.Summary Table of Cost – Benefit Analysis (in million Mau Rs in 1977 prices)Estimated Investment Cost (1987/8 –2031/2 ) 4,358Estimated Benefits (1987/8 – 2031/2)• From consumer payments• From Land values• From avoided cost of an epidemicTotal benefits5,7412.7204,75713,218Estimated Net Benefits 8,860Net Present Value at 10% 1,1163.4 Inputs to the Regional Action ProgrammeA. Programme Approach: Economic Appraisal as a Vital Instrument in EnvironmentalManagementThe application of Cost-Benefit Analysis demonstrates that environmental investment hingeslargely on identifying and estimating the full socio-economic value of environmentalresources that a proposed investment will protect. Without an estimate of the value ofenvironmental resources, governments are constrained to invest in environmental protectionwhen what will be protected is considered to have no value. To increase environmentalinvestment it is necessary to demonstrate that environmental investment improvesenvironmental quality and to link quality improvement to increase in value.There is another key issue addressed by Cost–Benefit Analysis. It assigns an estimatedsocio-economic value to ecological resources improving the methodological tools anddecision making capacities for environmental management. When the nature, extend andimportance of environmental resources are expressed in ecological terms, it becomes difficultto identify and incorporate the social and economic significance of environmental actionswithin an investment appraisal process. Cost-Benefit Analysis links ecological resources toan economic valuation system to demonstrate that the costs of protection measuresare worth the cost.Final Draft Report – Cost Benefit Case StudiesGPA Strategic Action Plan on Sewage, October, 200060