Inter-basin water transfer public agreements: A decision approach to quantity and price

Water transfers from regions with high rainfall and large reservoirs to regions with scarcity are currently viewed as necessary projects to assure supply and increase efficiency. In countries where most surface water is controlled by public agencies, the transfer requires a politically feasible agreement between them. Among the multiple subjects of the agreement, the present study only deals with the commercial problem of deciding the water transferable quantity and price in an equitable rational way, the decision to be agreed by the public agencies being recommended by independent experts. Aimed at the work of such experts, the paper proposes a decision stochastic approach to determine quantity and price by simulating the recipient's demand curve and the donor's supply curve for transferable water. This approach can be easily implemented using numerical tables containing geographical and economic data on the basins, which appear generally published in government surveys. A case study on the Tajo-Segura aqueduct in Spain and the recipient area of Lorca is developed.