Do Construction Delays Kill Irrigation Benefits? Quantifying the Economic Erosion of a Mega-Project Due to Synergistic Urban Encroachment

https://doi.org/10.46610/JoWRPS.2026.v011i02.003

Abstract

Construction delays and rapid land-use change are twin threats to the economic viability of large-scale public infrastructure. While usually studied in isolation, their combined effect can be catastrophic, especially for irrigation systems in rapidly peri-urbanizing regions. This paper quantifies the synergistic economic impact of a 22-year construction delay and projected urban expansion on the Sikta Irrigation Project (SIP) in Nepal. Using spatially derived land-use projections and inflation-adjusted cost-benefit analysis, we estimate that by the revised completion year (2032), the effective Culturable Command Area (CCA) will have shrunk from the DPR-planned 42,766 ha to 35,662 ha, a loss of 16.6%. When adjusted for Nepal's 6.7% annual inflation, the incremental irrigation benefit per hectare rises from Rs. 38,487 (2010) to Rs. 160,216 (2032). However, the reduced CCA translates into an annual benefit loss of Rs. 1.14 billion, accumulating to a staggering Rs. 21.58 billion (approx. US$ 162 million) in forgone benefits over the delay period. A sensitivity (Tornado) analysis reveals that the project's economic returns are far more sensitive to construction delays than to variations in urban growth rates – a 20% increase in delay reduces benefits by 16.42%, versus only 6.26% for a 20% increase in urbanization. We argue that conventional Detailed Project Reports (DPRs) that treat land use as static are no longer fit for purpose. To safeguard public investment, national irrigation strategies must adopt dynamic land-use monitoring, enforce agricultural zoning, and – above all – prioritize on-schedule project delivery.