SL 72-1994 Economic evaluation specification for water conservancy construction projects SL 72-94
Some standard content:
Industry Standard of the People's Republic of China
SL 72-94
Economic Evaluation Specification for Water Conservancy Construction Projects
Published on September 10, 1996
Ministry of Water Resources of the People's Republic of China
Implemented on July 1, 1997
Industry Standard of the People's Republic of China
About the Release of "Economic Evaluation Specification for Water Conservancy Construction Projects" SL 72-94 Notice
Editing unit: China Water Resources and Hydropower Planning and Design InstituteApproving department: Ministry of Water Resources of the People's Republic of ChinaMinistry of Water Resources of the People's Republic of China
Notice on the release of "Economic Evaluation Specifications for Water Conservancy Construction Projects" SL72-94
Shui Ke Jiao [1994] No. 103
China Water Resources and Hydropower Planning and Design Institute revised the original "Water Conservancy Economic Calculation Specifications SD139-85" (Trial) in accordance with the requirements of the "Technical Standard System for Water Conservancy and Hydropower Survey and Design" (Energy Technology [1988] No. 12) approved by the former Ministry of Energy and the Ministry of Water Resources. After the revision, it was renamed "Economic Evaluation Specifications for Water Conservancy Construction Projects" and was approved as an industry standard after review. Its name and number are "Economic Evaluation Specifications for Water Conservancy Construction Projects" SL72-94. It is now promulgated and will be implemented on May 1, 1994. In the process of implementing this "Specification", all units should pay attention to accumulating information and summarizing experience to provide a basis for the future revision of this "Specification", and please send your opinions and relevant information to the General Institute of Water Resources and Hydropower Planning and Design. This "Specification" is published and distributed by the Water Resources and Hydropower Press. March 9, 1994
National economic evaluation
Financial evaluation.
Uncertainty analysis·
Scheme comparison method:
SL72-94: Economic evaluation specification for water conservancy construction projects 7
Economic evaluation of water conservancy construction projects for renovation and expansion 8
Economic evaluation of water conservancy construction projects using foreign capital... 8
Supplementary indicators for comprehensive economic evaluation:
Appendix A Provisions on the classification and depreciation period of fixed assets of water conservancy projects Appendix B
Interim provisions on the cost sharing of comprehensive utilization water conservancy construction projects Appendix C Impact of major inputs and outputs of water conservancy construction projects Calculation method of sub-price Appendix D
Method for compiling national economic evaluation investment of water conservancy construction projects Appendix E
Method for simplifying and adjusting national economic evaluation investment of water conservancy construction projects Additional notes
SL72-94: Standard for economic evaluation of water conservancy construction projects 1 General
1.0.1 In order to meet the needs of economic evaluation of water conservancy construction projects, in accordance with the relevant laws and regulations currently in force in the country, combined with the characteristics of water conservancy construction projects and practical experience in recent years, the "Water Conservancy Economic Calculation Standard" SD139-85 (Trial) promulgated by the former Ministry of Water Resources and Electric Power in 1985 was revised and renamed "Water Conservancy Construction Project Economic Evaluation Standard". 1.0.2 This standard is mainly applicable to the economic evaluation of feasibility study and preliminary design stages of large and medium-sized water conservancy construction projects. The economic evaluation of feasibility study and preliminary design stages of river basin, regional planning and small water conservancy construction projects can be appropriately simplified. 1.0.3 In the economic evaluation of water conservancy construction projects, it is necessary to pay attention to the basic work such as investigation, collection, analysis and collation of social and economic data. The survey content should be conducted purposefully in combination with the characteristics of the project. When citing the investigated and collected socio-economic data, its historical background should be analyzed, and it should be adjusted and converted according to the socio-economic conditions and price levels of each period. 1.0.4 The economic evaluation of water conservancy construction projects should include national economic evaluation and financial evaluation. The national economic evaluation should adopt shadow prices from the perspective of the country as a whole, analyze and calculate the total costs and benefits of the project, examine the net contribution of the project to the national economy, and evaluate the economic rationality of the project. The financial evaluation should adopt financial prices from the perspective of the project finance, analyze and calculate the financial expenditure and income of the project, examine the profitability and repayment ability of the project, and evaluate the financial feasibility of the project. 1.0.5 The economic evaluation of water conservancy construction projects should be based on national economic evaluation, and financial evaluation should also be emphasized. For water conservancy construction projects of social welfare nature, if the national economic evaluation is reasonable, but there is no financial income or very little financial income, financial analysis and calculation should be carried out to propose the amount of funds required to be subsidized by the state to maintain the normal operation of the project and the economic preferential measures and relevant policies to be taken.
1.0.6 For water conservancy construction projects with comprehensive utilization functions, both national economic evaluation and financial evaluation should evaluate the project as a whole.
When conducting research and comparison of project plans, the investment and annual operating expenses of the project should be allocated according to the various functions of the project, the rationality of the various functions of the project should be analyzed, the requirements of various functions should be coordinated, and the development method and engineering scale of the project should be reasonably selected. The method of cost allocation is shown in Appendix B.
1.0.7 The economic evaluation of water conservancy construction projects should follow the principle of consistent calculation of costs and benefits, take into account the time value of funds, and mainly use dynamic analysis, supplemented by static analysis. 1.0.8 The calculation period of water conservancy construction projects includes the construction period, the initial operation period and the normal operation period. The normal operation period can be determined according to the specific conditions of the project or the following provisions: Large and medium-sized hydropower stations for flood control, waterlogging control, irrigation, urban water supply, etc.
Electromechanical drainage and irrigation stations, small hydropower stations
30 to 50 years
40 to 50 years
15 to 25 years
1.0.9 The benchmark for calculating the time value of money should be set at the beginning of the first year of the construction period. Except for the interest on loans in the current year, inputs and outputs are incurred and settled at the end of the year.
1.0.10 This specification mainly stipulates the basic principles and general calculation methods for the economic evaluation of water conservancy construction projects, and focuses on the economic evaluation of construction projects such as flood control, waterlogging control, irrigation, urban water supply and comprehensive utilization. The economic evaluation of construction projects such as hydropower generation, shipping and soil and water conservation should also refer to the relevant specifications and regulations issued by the competent departments. 2.1 General Provisions
SL72-94: Economic Evaluation Specifications for Water Conservancy Projects 2 National Economic Evaluation
2.1.1 The costs and benefits in the national economic evaluation of water conservancy projects should be expressed in monetary terms as much as possible; if they cannot be expressed in monetary terms, other quantitative indicators should be used; if they are really difficult to quantify, they can be described qualitatively. 2.1.2 The costs of water conservancy projects should calculate direct costs and indirect costs. The benefits of water conservancy projects should analyze and calculate direct benefits and indirect benefits. When calculating project costs and benefits, omissions and duplications should be avoided. 2.1.3 Taxes, planned profits, domestic loan interest, and various subsidies that are transferred within the national economy should not be included in the costs or benefits of the project.
2.1.4 When conducting national economic evaluation, shadow prices should be used for both inputs and outputs. Under the premise of not affecting the evaluation conclusion, shadow prices can also be used only for the part whose value accounts for a large proportion of the costs or benefits, and the rest can be used for financial prices. The shadow prices of major inputs and major outputs should be calculated in accordance with the provisions of Appendix C of this specification. The shadow prices of non-major inputs and non-major outputs may adopt the shadow prices specified in the "Economic Evaluation Parameters for Construction Projects" issued by the state. 2.1.5 When conducting national economic evaluation of water conservancy construction projects, the 12% social discount rate specified by the state shall be adopted. For water conservancy construction projects that are or have social welfare nature, the social discount rates of 12% and 7% may be used for evaluation at the same time for reference in project decision-making.
2.2 Cost calculation
2.2.1 Project costs
The costs of water conservancy construction projects shall include the fixed asset investment, working capital and annual operating expenses of the project. 2.2.2 Fixed asset investment
2.2.2.1 Fixed asset investment shall include all construction costs of the main project and corresponding supporting projects invested by the state, enterprises and individuals in various ways to achieve the design scale of the water conservancy construction project. 2.2.2.2 The main project investment of large-scale water conservancy construction projects shall be compiled in accordance with Appendix D of this specification. The main project investment of medium-sized water conservancy construction projects shall be calculated in accordance with Appendix E of this specification. For large-scale water conservancy construction projects that are not particularly important, if it is difficult to use the method in Appendix D for investment compilation due to conditions, it can also be calculated according to Appendix E. When calculating the main project investment of the project according to Appendix E, the indirect costs not included in the engineering design budget (estimate) should be added. 2.2.2.3 The investment of supporting projects can adopt the expanded indicators of typical designs or refer to similar projects for estimation. The rationality and reliability of the indicators used should be carefully analyzed.
2.2.2.4 The shadow prices of inputs for water conservancy construction projects should be divided into the following three categories and calculated separately: (1) foreign trade goods that directly or indirectly affect the country's imports or exports; (2) non-foreign trade goods that do not affect the country's imports or exports; (3) special inputs such as labor and land. When the type of input is difficult to distinguish, it is advisable to select the price that is unfavorable to the national economic evaluation of the project from the several prices of the available inputs.
2.2.2.5 Fixed asset investment in water conservancy construction projects should be arranged on an annual basis based on reasonable construction periods and construction plans. 2.2.3 Working capital
2.2.3.1 Working capital for water conservancy construction projects should include revolving funds for purchasing fuel, materials, spare parts, and paying employee wages required to maintain the normal operation of the project, and should be determined in accordance with relevant regulations or by referring to similar projects. 6
SL72-94: Economic Evaluation Specifications for Water Conservancy Construction Projects 2.2.3.2 Working capital should be determined based on the scale of production starting from the first year of the project. 2.2.4 Annual operating expenses
2.2.4.1 The annual operating expenses of a water conservancy construction project should include all operating expenses required to be incurred each year during the initial and normal operation of the project, and can be adjusted and calculated based on the total cost of the project. 2.3.4.2 The annual operating expenses of each year in the initial operation of the project can be determined based on the scale of production and actual needs. 2.3 Benefit Calculation
2.3.1 Calculation Principles
2.3.1.1 The benefits of water conservancy construction projects should be calculated based on the direct and indirect benefits that can be obtained by comparing the projects with and without them. 2.3.1.2 Water conservancy construction projects should use the series method or frequency method to calculate their multi-year average benefits as the basis for the national economic evaluation of the projects. For construction projects such as flood control, waterlogging control, irrigation, and urban water supply, the benefits of the design year and the year of extreme floods or droughts should also be calculated for project decision-making research.
2.3.1.3 The benefits of water conservancy construction projects in the initial operation period and each year of normal operation should be reasonably calculated based on the project production plan and supporting degree.
2.3.1.4 Measures should be taken to remedy the adverse effects of water conservancy construction projects on society, economy, and environment. If they cannot be remedied, their negative benefits should be calculated.
2.3.1.5 The residual value of fixed assets and working capital of water conservancy construction projects should be recovered once at the end of the project calculation period and included in the benefits of the project.
In addition to calculating the benefits of each sub-item according to the project function, the overall benefits of the project should also be calculated for comprehensive utilization water conservancy construction projects.
2.3.2 Flood control (ice and tide control) benefits
2.3.2.1 The flood control benefits of water conservancy construction projects should be calculated based on the flood losses that can be reduced and the land development and utilization value that can be increased by the project, and expressed in terms of multi-year average benefits and annual benefits of major floods. 2.3.2.2 When using the series method to calculate the multi-year average flood control benefits, the series used should be representative. If there is a lack of major flood years, appropriate processing should be made.
2.3.2.3 Flood losses can be mainly divided into the following five categories: (1) Losses caused by casualties;
(2) Losses caused by damage to urban and rural houses, facilities and materials; (3) Losses caused by suspension of industrial and mining production, suspension of business, and interruption of transportation, electricity and communications; (4) Losses caused by reduced production in agriculture, forestry, animal husbandry, sideline production and fishery; (5) Expenditure on flood control, emergency rescue and disaster relief. 2.3.2.4 The losses of various protected objects after floods should be calculated based on the depth and duration of flooding and the specific conditions of each region.
(1) For flooded farmland that can be replanted after floods, the losses should be calculated based on the difference between the lost output value and the output value after replanting, plus the additional cost of replanting. For farmland that has significantly increased fertilizer, the increased yield benefits can be appropriately estimated and deducted from the flood losses. (2) The losses of flooded public and private property should be calculated based on the cost of repair, remediation or cleaning. 2.3.2.5 The flood control benefits of water conservancy construction projects in the initial stage of operation and each year of normal operation should be predicted and estimated based on the social and economic development plan of the protection area and the construction plan of flood control safety facilities. 2.3.2.6 The benefits of ice prevention and moisture prevention can be analyzed and calculated in combination with the specific conditions in accordance with the provisions of Sections 2.3.2.1 to 2.3.2.5 of this Code.
2.3.3 Benefits of flood control (alkali and waterlogging control)
SL72-94: Economic Evaluation Standards for Water Conservancy Projects 7
2.3.3.1 The benefits of flood control for water conservancy projects should be calculated based on the flood losses that can be reduced or exempted for the project, and expressed as multi-year average benefits and annual benefits of extremely severe floods.
2.3.3.2 When using the frequency method to calculate the multi-year average flood control benefits, the flood frequency method, the waterlogging volume method, or the rainfall flood correlation method can be selected according to the characteristics of the flood-prone area and the data. 2.3.3.3 The losses caused by flood disasters can be mainly divided into the following four categories: (1) Losses caused by reduced production in agriculture, forestry, animal husbandry, sideline production, and fishery; (2) Losses caused by damage to houses, facilities, and materials; (3) Losses caused by suspension of industrial and mining production, suspension of business, and interruption of transportation, electricity, and communications; (4) Expenses for drainage and disaster relief. 2.3.3.4 The benefits of water conservancy projects in controlling alkali and waterlogging should be calculated based on the experimental or survey data on the relationship between groundwater depth, soil salinity and crop yield, combined with the functional analysis of the project in reducing groundwater and soil salinity. 2.3.3.5 If the benefits of waterlogging control are closely related to the benefits of controlling alkali and waterlogging, they can be combined to calculate the comprehensive benefits of the project. 2.3.4 Irrigation benefits
2.3.4.1 The irrigation benefits of water conservancy projects should be calculated based on the benefits that can be obtained from the project's provision of irrigation water to agriculture, forestry, animal husbandry, etc., expressed in terms of multi-year average benefits, design annual benefits and benefits in a particularly severe drought year. 2.3.4.2 Irrigation benefits can be calculated using the following methods: (1) The apportionment coefficient method is calculated by multiplying the total increased output value that can be obtained by comparing irrigation and agricultural technical measures with and without the project by the irrigation benefit apportionment coefficient. bzxz.net
(2) The shadow water price method is calculated by multiplying the irrigation water supply by the shadow water price of the area. (3) The water shortage loss method is calculated by the loss caused by water shortage in agricultural production. 2.3.4.3 The benefits of irrigation water-saving facilities should be calculated based on the amount of water that can be saved by the water-saving facilities and used to expand the irrigation area or provide urban water.
2.3.4.4 When irrigation projects are part of agricultural projects, the benefits of irrigation and agricultural technical measures should be combined to calculate the comprehensive benefits of the project.
Irrigation benefits are closely related to waterlogging control, alkali control and waterlogging control benefits, and they can be combined to calculate the comprehensive benefits of the project. 2.3.5 Urban water supply benefits
2.3.5.1 The urban water supply benefits of water conservancy construction projects should be calculated based on the benefits that can be obtained from the project providing production and living water to urban industrial and mining enterprises and residents, and expressed in terms of multi-year average benefits, design annual benefits and annual benefits in severe droughts. 2.3.5.2 The urban water supply benefits can be calculated using the following methods: (1) Best equivalent alternative method If there are conditions for building an equivalent alternative project or water-saving measures can be implemented to replace the project to supply urban water, it can be calculated based on the annual cost of the best equivalent alternative project or water-saving measures. (2) Water shortage loss method is calculated based on the loss caused by water shortage to urban industrial and mining enterprises. (3) Shadow water price method is calculated by multiplying the urban water supply volume of the project by the shadow water price of the area. (4) Apportionment coefficient method is estimated by multiplying the increased output value of industrial and mining enterprises when the project is in place by the apportionment coefficient of water supply benefits. 2.3.5.3 Urban water supply construction usually includes water source construction and water plant and pipeline construction. Its water supply benefits should be apportioned according to the proportion of the corresponding engineering facility costs to the total costs.
2.3.6 Rural life water supply benefits
The rural life water supply benefits of water conservancy construction projects should be calculated based on the benefits that can be obtained by the project providing water for human and livestock in rural areas. Mainly include:
SL72-94: Economic Evaluation Standards for Water Conservancy Construction Projects (1) Saving the labor, animal power, machinery and corresponding fuel, material and other costs of transporting water; (2) Improving water quality and reducing the medical and health care costs that can be saved by reducing diseases (3) Increasing the benefits of livestock products.
2.3.7 Hydropower generation benefits
2.3.7.1 The hydropower generation benefits of a water conservancy construction project shall be calculated based on the benefits obtained from the capacity and electricity provided by the project to the power grid or users. The following methods may be used:
(1) The best equivalent alternative method is calculated based on the annual cost of the best equivalent alternative facilities. (2) The shadow electricity price method is calculated by multiplying the effective electricity provided by the project by the shadow electricity price. 2.3.7.2 The multi-year average power generation of a hydropower station shall be calculated using the series method. If the series is short and lacks representativeness, the weighted average of representative years such as dry years, normal years and wet years may be used for calculation. 2.3.7.3 The capacity and electricity of a hydropower station shall be reasonably determined based on the power and electricity balance analysis of the power system. 2.3.7.4 For cascade hydropower stations, in addition to considering the benefits of the station itself, the benefits of other cascade hydropower stations that can be increased due to the construction of the hydropower station at this level shall also be considered.
2.3.8 Shipping Benefits
2.3.8.1 The shipping benefits of a water conservancy construction project shall be calculated based on the benefits obtained by providing or improving navigation conditions. The following methods may be used:
(1) Comparison method: Calculate the benefits obtained by saving transportation costs, improving transportation efficiency and improving shipping quality by comparing the project with and without the project.
(2) Best equivalent alternative method: Calculate the annual cost of the best equivalent alternative facilities. 2.3.8.2 When the comparison method is used, the shipping benefits mainly include: (1) The freight that can be saved by replacing road or rail transportation. (2) The transportation, transshipment and loading and unloading costs that can be saved by improving and improving port berthing conditions and shipping conditions. (3) The benefits brought by shortening the time for passengers and goods in transit, shortening the time for ships to stay in port, and shortening the time for waiting for tides in tidal rivers.
(4) The benefits brought by improving shipping quality and reducing marine casualties. 2.3.8.3 The benefits of water replenishment and navigation of water conservancy construction projects can be calculated by referring to the method specified in Article 2.3.8.1 of this Code. In areas with conditions, it can also be calculated by multiplying the average water replenishment volume over many years by the shadow water price of the area. 2.3.9 Other water conservancy benefits
2.3.9.1 The benefits of water conservancy measures in water and soil conservation projects can be calculated in combination with agricultural, forestry, animal husbandry and other measures. The main benefits are: (1) reducing the loss of water, soil and fertilizer, and increasing the output value of local agricultural, forestry, animal husbandry and other products; (2) reducing the losses caused by mountain torrents and mudslides; (3) reducing the losses caused by sediment to rivers, reservoirs and other water conservancy projects. 2.3.9.2 The benefits of water conservancy projects in pastoral areas should be calculated based on the benefits obtained by the project in developing grassland irrigation and providing drinking water for people and livestock in the pasture, and expressed in terms of multi-year average benefits and benefits in years of extreme disasters. 2.3.9.3 The fishery benefits of water conservancy projects should be calculated based on the benefits obtained by using the water area provided by the project and combining it with other measures for aquaculture. The following methods can be used: (1) Shadow price method: calculate by multiplying the increase in the output of aquatic products by the shadow price of aquatic products. (2) Best equivalent alternative method: calculate by the annual cost of establishing the best equivalent alternative plan. 2.3.9.4 The benefits of improving water quality of water conservancy projects should be calculated based on the amount of water that the project can provide to dilute sewage and the benefits obtained by reducing water pollution. The following methods can be used: SL72-94: Economic Evaluation Standards for Water Conservancy Projects (1) The best equivalent alternative method is calculated by the annual cost of building the best equivalent alternative engineering facilities. (2) The shadow water price method is calculated by multiplying the amount of water provided to dilute sewage by the shadow water price of the area. (3) The pollution loss method is calculated by the loss caused by water pollution to industrial and agricultural production. 9
2.3.9.5 The benefits of tidal flat development of water conservancy projects should be calculated by multiplying the output of tidal flat development products by the shadow price based on the benefits that can be obtained by using the water conservancy facilities provided by the project and combining other measures to develop and utilize tidal flat resources. 2.3.9.6 The tourism benefits of water conservancy projects should be calculated by multiplying the annual average number of tourists by the tourism cost per person based on the benefits that can be obtained by using the tourist sites provided by the project and combining other supporting facilities. The tourism cost per person can be determined based on the tourism conditions and passenger conditions of the project and with reference to similar projects. 2.4 National economic evaluation indicators and evaluation criteria 2.4.1 The national economic evaluation of water conservancy construction projects can be carried out based on evaluation indicators and evaluation criteria such as economic internal rate of return, economic net present value and economic benefit-cost ratio.
2.4.2 The economic internal rate of return (EIRR) should be expressed as the discount rate when the cumulative net benefit present value of each year in the project calculation period is equal to zero. Its expression is:
(BC)(1+EIRR)-t=0
Economic internal rate of return;
Annual benefit, 10,000 yuan;
C——Annual cost, 10,000 yuan;
Calculation period, year;
t——the serial number of each year in the calculation period, the serial number of the benchmark point is O; (B-C)t——the net benefit of the tth year, 10,000 yuan. (2.4.2)
The economic rationality of the project should be determined by comparing and analyzing the economic internal rate of return (EIRR) and the social discount rate (i). When the economic internal rate of return is greater than or equal to the social discount rate (EIRR≥i), the project is economically reasonable. 2.4.3 The economic net present value (ENPV) should be expressed as the sum of the net benefits of each year in the project calculation period converted to the present value at the beginning of the calculation period using the social discount rate (i). Its expression is: ENPV =
Where ENPV—economic net present value, ten thousand yuan;—social discount rate.
(BC)(1+ i)-
The economic rationality of the project should be determined based on the size of the economic net present value (ENPV). When the economic net present value is greater than or equal to zero (ENPV>0), the project is economically reasonable. 2.4.4 The economic benefit-cost ratio (EBCR) should be expressed as the ratio of the project benefit present value to the cost present value. Its expression is: B(1+ i)-
EBCR = -
Zc(1+ i)
Wherein, EBCR is the economic benefit-cost ratio;
B is the benefit in the tth year, 10,000 yuan;
Ct is the cost in the tth year, 10,000 yuan.
SL72-94: Standard for economic evaluation of water conservancy construction projects The economic rationality of a project should be determined based on the size of the economic benefit-cost ratio (EBCR). When the economic benefit-cost ratio is greater than or equal to 1.0 (EBCR>1.0), the project is economically reasonable. 2.4.5 For national economic evaluation, a national economic benefit-cost flow table should be prepared according to Table 2.4.5 to reflect the benefits, costs and net benefits of each year during the project calculation period, and calculate the various national economic evaluation indicators of the project. Table 2.4.5 National economic benefit and cost flow table (10,000 yuan) Year
Benefit flow B
Benefits of various functions of the project
Recovery of residual value of fixed assets
Recovery of working capital
Indirect benefits of the project
Cost flow C
Investment in fixed assets
(including investment in renovation and transformation)
Working capital
Annual operating expenses
Indirect costs of the project
Net benefit flow (BC)
Cumulative net benefit flow
Evaluation indicators Economic internal rate of return:
Economic net present value (=):
Construction period
Economic benefit-cost ratio (=):
Note: The benefits of various functions of the project should be calculated based on the actual functions of the project. 3 Financial evaluation
3.1 General provisions
Initial operation
Normal operation period
3.1.1 Financial evaluation should be conducted based on the proposed source of funds, financing methods, loan plans and repayment conditions, in accordance with the current national fiscal and taxation system, using financial prices. 3.1.2 Financial evaluation can be based on the national economic evaluation, and a few plans with better national economic effects and greater implementation possibilities should be studied.
3.1.3 For water conservancy construction projects with certain financial income such as water supply and power generation, financial evaluation should be conducted based on the current water and electricity price system. If the evaluation results are not feasible, the water price and electricity price should be calculated and analyzed for their reality and feasibility based on the industry's financial benchmark rate of return and loan repayment requirements.
3.2 Financial expenditure
SL72-94: Economic evaluation specifications for water conservancy construction projects 3.2.1 The financial expenditure of water conservancy construction projects should include the total investment of the construction project, annual operating expenses, working capital, taxes and other expenses. 11
3.2.2 The total investment of water conservancy construction projects shall include fixed asset investment, fixed asset investment direction adjustment tax and loan interest during the construction period and part of the initial operation period.
Fixed asset investment includes construction engineering costs, electromechanical equipment and installation engineering costs, metal structure equipment and installation engineering costs, temporary engineering costs, construction land and reservoir flooding treatment compensation fees, other costs and contingency fees, etc., which shall be compiled according to the depth requirements of different design stages and relevant specifications.
3.2.3 Annual operating expenses shall include wages and welfare expenses, materials, fuel and power costs, maintenance costs and other costs, etc., which can be calculated item by item or calculated by deducting depreciation, amortization and net interest expenses from the total cost of the project. 3.2.4 Working capital shall include all working capital required to maintain the normal operation of the project. 3.2.5 Product sales tax and surcharges, income tax and other taxes shall be calculated according to the nature of the project and the tax items and tax rates stipulated in the current national tax laws.
3.2.6 Loans for water conservancy construction projects shall be accrued with interest annually. Interest during the construction period should be included in fixed assets; interest during the normal operation period should be included in the total cost of the project; interest in the initial operation period can be included in fixed assets or the total cost of the project according to different circumstances. 3.3 Total Costs
3.3.1 The total cost of a water conservancy construction project should include all costs and expenses spent on the production, operation, sale of products and provision of services during a certain period of time. It can be calculated by economic use or by economic nature. 3.3.2 The total cost of a water conservancy construction project should include manufacturing costs and period expenses according to economic use. Manufacturing costs should include direct material costs, direct wages, other direct expenses and manufacturing expenses. Period expenses should include administrative expenses, financial expenses and sales expenses. 3.3.3 The total cost of water conservancy construction projects shall include materials, fuel and power costs, wages and welfare costs, maintenance costs, depreciation, amortization, net interest expenses and other expenses according to economic nature. Depreciation shall be calculated according to Appendix A, based on the depreciation period of various types of fixed assets, using the average life method; it can also be calculated by referring to the actual annual comprehensive depreciation rate of similar projects that have been built and multiplying the original value of the fixed assets of this project. 3.4 Financial income
3.4.1 The financial income of water conservancy construction projects shall include the income obtained from the sale of water conservancy products and the provision of services. 3.4.2 The annual total profit shall include the annual profit obtained from the sale of water conservancy products and the provision of services, which shall be calculated by deducting the annual total cost and annual sales tax and surcharges from the annual financial income. 3.4.3 The annual total profit shall first make up for the losses of the previous year, then pay income tax in accordance with relevant regulations, and then distribute according to the accounting system.
3.5 Financial Statements
3.5.1 When conducting financial evaluation of water conservancy projects, basic statements such as cash flow statement, profit and loss statement, capital source and application statement, balance sheet, financial foreign exchange balance sheet, etc. should be prepared according to Tables 3.5.1-1 to 3.5.1-6. If necessary, auxiliary statements such as total cost and expense estimate table and loan principal and interest payment calculation table can also be prepared according to Tables 3.5.1-7 to 3.5.1-9. 3.5.2 For water conservancy projects of a social welfare nature or with little financial income, the financial statements can be appropriately reduced.
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