7.3 Allocation of benefits
In most countries water resources belong to t he State,and t his is generally also the case f or the land on which the project is built.A hydro project,particularly one with reser voir storage,can aff ect a lar ge nu mber of people,so me of who m are remote fr o mthe site itself.
These facts raise so me i mportant issues regar ding the sharing of benefits arising fr o m a project.The most f undamental point is that some of the benefit must accr ue,either directly or indirectl y,to t he State.For inter nal pr ojects suppl ying do mestic electricity demand,this might take the f or mof stable energy prices and other benefits to the utility in the f or m of ancillar y services;but f or an export pr oject where power is being used in another country,a more explicit system of pay ment is needed.
The principal stakehol ders in any project are t he devel oper,the electricity user/supplier(if different),govern ments,financing agencies,co mmunities and individuals directly aff ected by the scheme(f or example,traditional resource users).These stakeholders should be identified early in the planning and develop ment approval process and t heir legiti mate interests acknowledged and taken into account in t he financial and economic evaluation processes.
The above objectives i mply t he need f or the f ollowing:
Balanced commercial agreements in the case of privately f unded projects(https://www.daowen.com)
Reasonable returns on equity,consistent with the risk profile and international nor ms
Transparency in procurement processes
Directl y negotiated contracts to be subject to independent audit
Ongoing auditing/monitoring of economic perfor mance against projected benefits.