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close this bookStormwater Drainage and Land Reclamation for Urban Development (HABITAT, 1991, 94 p.)
View the documentA. Urban land-use planning
View the documentB. Urban health
View the documentC. Socioeconomic benefits

C. Socioeconomic benefits

The principal socioeconomic benefit of urban drainage and land-reclamation projects is the increase in the value of land, although, as noted in section A above, if the urban planning process is not equitable, this can have a detrimental effect on the urban poor. Provided drainage and reclamation projects have been properly designed and executed, significant increases in the value of the land are basically inevitable, since land which is subject to frequent and serious flood inundation has very a low value compared with land which is protected or has a low risk factor associated with it. Improved drainage of this low-lying land can significantly increase the land values to the benefit of the owners and also to the community generally due to the ability of local authorities to increase the valuation of the property tax base within the city.

Land which is subject to inundation is frequently low-lying and consequently the drainage investment required to protect it against a reasonable frequency of flooding is significant. It is often necessary to create artificial drainage patterns within the site so that the area can be drained for local storms and protected from major flows in the catchment waterways. A typical example, from Greater Manila, is given in box II.1. However, a surplus of economic benefits and financial viability cannot be taken for granted in any drainage and reclamation project. Careful analysis must be made of the costs of providing services at the appropriate levels and standards, together with conservative estimates of land values when the use is changed. It is essential that the environmental benefits and negative impacts be included in the equation, even though these are notoriously difficult to measure. In addition, the costs of correcting any external adverse effects must be included in the development costs. Further details are given in section V.C.

There are, it should be noted, serious economic disbenefits associated with forgetting about drainage. An example of this is to be found in the urban component of the Million Houses Programme in Sri Lanka. The Government was prepared to loan up to Rs 15,000 to plot holders to build a house, but it found it also had to spend an average of Rs 12,000 on plot preparation: this was not taken into account at the planning stage and so it ended up as a non-reclaimable government investment which was principally used to reclaim low-lying land designated for low-income housing or upgrading land already illegally occupied by the householders.

Box II.1 Drainage increases land values in Dagat Dagatan, Greater Manila

The site area in Dagat Dagatan was 410 hectares. The drainage component of the services/infrastructure provided represented 17 per cent of the total cost for off-site drainage work and 13 per cent for on-site drainage works. Out of a total cost (1978) of 452 million pesos, drainage costs therefore represented 229,000 pesos per hectare or 23 pesos per square metre. Land values increased from about 35 pesos per square metre to 94 pesos per square metre or 2.7 times due to the improvements and investment of infrastructure.

To make this land useful for urban purposes, reclamation was required to raise the site above the normal sea level and to grade the site to create local contours to provide the minor drainage system.

The economic analysis undertaken for the project indicated that net benefits were all positive for three different land sale prices which were evaluated. Even at the price of 75 pesos per square metre there were positive benefits. In addition, there were substantial social benefits both on the site and off the site due to improvement of communication networks and locational advantages which could not be calculated in money terms but which were very real benefits. Additional social benefits noted in the economic analysis were the increased productivity of neighbouring land and improvements provided by the Dagat Datan development.

The reclamation significantly increased the productivity from the land due to the ability of the government agencies to consolidate a large number of small holdings into a single large parcel for redevelopment from fish ponds to urban use.