Cost-benefit Analysis on the Implementation of Treated Wastewater Reuse: Case of Sekem Farm El-wahat, Egypt

doi:10.21203/rs.3.rs-4618659/v1

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Cost-benefit Analysis on the Implementation of Treated Wastewater Reuse: Case of Sekem Farm El-wahat, Egypt

https://doi.org/10.21203/rs.3.rs-4618659/v1

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published 02 Sep, 2024

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In a context of increasing pressure on water resources and severe aridity; expansion in the reuse of naturally treated wastewater can be a viable and low-cost solution particularly for irrigation forests, green non-fruit trees, fabric crops, industrial oils, and non-edible raw crops. Wastewater treatment is increasingly recognized as a potential means in El-Wahat El-Bahariya in Egypt. However, investment decisions concerning the reuse of treated wastewater in irrigation needs to be justified in terms of financial and economic feasibility and profitability. Therefore, this research study aims to conduct a cost-benefit analysis (CBA) of an investment project “reuse treated wastewater in irrigation compared to other modes of water irrigation projects. The CBA results revealed that the cost of the initial investment for the production of treated water used for irrigating green non-fruit trees, Bamboo trees, and Cactus in Sekem El-Wahat, is economically efficient with 88% compared to the exploitation of aquifer groundwater for irrigating the same crops. That project allows for an economic gain of about 4,428.5 €/ha compared to the cost of producing aquifer ground water in Sekem Farm El-Wahat is estimated at 10,800 €/year. Substituting the use of aquifer ground water for irrigating crops with reuse of treated wastewater helps reducing energy consumption and offers great financial benefits to the beneficial communities. A net benefit of the reuse of treated wastewater project is largely positive with NPV equivalent to 4599 €/year with a medium economic efficiency (BCR) of about 0.44.

The growing population exacerbated the demand for water, food, energy and other human needs, particularly in regions with sever aridity in the world. Yet, changing climate’s impacts on surface water supplies and demands caused increasing reliance on groundwater resources. Egypt, as an arid and highly populated country, faces many challenges in the water sector. Its Nile Delta aquifer is replenished directly by the surface Nile water. In this context, the reuse of naturally treated wastewater can be solutions to problems of quantitative and qualitative management nature of the resource [1],[2],[3]. Wastewater treatment is increasingly recognized as a potential means of water supply [4]. In addition to reducing the negative environmental impacts resulting from the discharge of wastewater into waterways, it reduces pressure on the available fresh water resources so it can satisfy the drinking needs. In addition, it is more convenient for the isolated communities. It provides an additional source of water that can be potentially used for irrigation [2], [3] [5].

One of the previous studies considered a new community, to be supplied with 20,000 m³ of water/day for irrigation. That community is located on the outskirts of a larger community of 500,000 inhabitants [6]. To provide 20,000 m³ of fresh water to the new community, the study proposed the construction of a decentralized wastewater treatment plant intended to supply an irrigation network with such an amount of treated water. As a trade-off, freshwater originally planned to be supplied for agricultural purposes but eventually is supplied to secure fresh water for households belonging to the new community [2],[4],[6].

Egypt's economic growth in various sectors depends on the availability of water resources. Thus, the supply of Egyptian water demand is ensured by approximately 82% of surface water, and 12% of groundwater, and the remaining 6% comes from the reuse of agricultural drainage water and treated wastewater [2],[3]. Virtual water in terms of importing strategic commodities from various other countries has been used to close the food requirements to all Egyptians [7]. Egypt is increasingly using groundwater to meet its needs, particularly in agriculture [8]. However, the growing water demand exceeds the capacity of the groundwater reservoir. Particularly in areas of the western Nile Delta and along the desert fringes of the Nile Valley, there is overexploitation of aquifer waters. The Egyptian overall renewable water resources come mainly from the Nile Valley and the Nile Delta with a total of approximately 57 billion cubic meters per year [3].

According to the Egyptian WWT Law (ECP 501, 2017), [9], the reuse of treated wastewater is regulated for non-fruitful trees, and fiber crops such as Cotton, industrial oils, and Cactus, according to the effectiveness of the treatment with safeguard protection. The reuse of treated wastewater holds promise for the future, particularly in areas with a very high water deficit (such as El-Wahat El-Bahariya, Egypt). However, this Reuse of treated wastewater presents secondary risks of ingestion linked to bacteria and parasites [8],[10]. It is necessary to plan a broader follow-up assessment covering health risk, particularly the inhalation aspects. This assessment is made difficult in particular by the need to mobilize environmental and health sciences, which are still unaccustomed to working together.

Efficiency in the use and distribution of water resources resulting from better governance and a regulatory framework should result in maximizing the use of available and newly developed water resources. These measures involve the use of a rigorous system of monitoring, compliance, and sanctions supporting this legal framework. The emphasis should be on the water demand perspective rather than the supply perspective. Irrigation using treated wastewater for investment needs to be justified in terms of financial and economic profitability and the resulting results contributing to the prosperity of and benefiting to a country, a society, or even a private sector [11],[12],[13],[14],[15]. Such justification is particularly necessary to determine, based on econometric investigations, whether the measures taken are in favor of agro-environmental measures within the national agricultural policy and water resource management. This is because irrigation projects and programs generally represent the most expensive type of investment, in terms of specific unit costs per developed area. There is a need to understand the determinants of costs and benefits of efficient water reuse. Therefore, the cost-benefit analysis process estimates the benefits and costs of an investment for two reasons: 1) to determine whether the project is viable and whether it is a good investment; and 2) to compare a project investment with other competing projects, to determine which is more feasible [16].

This research study aims to conduct a cost-benefit analysis (CBA) of an investment project “the reuse treated wastewater in irrigation”, called the REUSE project in Sekem Farm El-Wahat in Egypt compared to other modes of water irrigation projects.

Description of the REUSE project framework in comparison to the reference case is given below.

2.1 Description of the study area

In Sekem Farm El-Wahat, Egypt is part of Sekem Company for Land Reclamation (Fig. 1), there are difficulties encountered in initiating a project to create an outfall in an aquatic environment (case of Nile), to respect the standards for discharge into the natural environment. The project leader (Heliopolis University for Sustainable Development, Egypt) considered investing in the treatment of wastewater from the rural area of the population of Sekem Farm El-Wahat by natural lagoon treatment (engineering constructed instream wetland treatment) taking advantage of the Saharan solar energy potential of the region. HUSD plans, in (Phase I) up to (2023–2024), the use of treated wastewater to irrigate the forest belt (12 km length and 50 m width surrounding Sekem Farm El-Wahat) using non-fruitful trees. The target is to increase carbon sequestration (reducing carbon dioxide emissions in the atmosphere) and improve the micro-climate in the study area. Currently, the total number of planned trees is between 70,000 and 80,000 trees, constituting a green corridor. The types of grown trees are Acacia Trees, Tamaris Trees and Desert Willow Trees. Perhaps other native desert trees are also there. Those trees are adapted to a dry climate, and saline irrigation water, and can survive in harsh climate conditions and alkaline soils.

2.2 Project Scope and its reference framework

The REUSE project aims at reusing the treated wastewater for irrigation of woody trees among other non-fruitful crops within Sekem Farm El-Wahat. This REUSE project is a low-cost, nature-based, and efficient engineering instream constructed wetland technology (Fig. 2). The technical details are located on the PRIMA/Horizon 2020 funded MED-WET project’s website (https://www.medwet-eu.com/wetlands), (MED-WET, 2024), [17]. Thus, the environment of El-Wahat El-Bahariya is the main beneficiary. For the managers of Sekem farm El-Wahat, it constitutes a net cost. The net benefit of the Sekem Farm El-Wahat green space, however, from the point of view of the community, it largely offsets the net costs of the investments of other actors. This analysis highlights the need to seek financial compensating solutions to get closer to win/win solutions. The reference situation is the irrigation of non-fruitful trees in alignment with the green space of Sekem Farm El-Wahat using drip irrigation from the aquifer’s groundwater. The irrigation of the green spaces of Sekem farm El-Wahat is presented as an outlet for this treated wastewater, a solution alternative to an outlet in an aquatic environment, widely criticized by environmental protection associations. The Cost Benefit Analysis (CBA) is based on an economic analysis of water production by naturally treating the domestic wastewater and agricultural drainage in comparison to tapping the aquifers’ groundwater.

Thus, it is estimated that the geographical proximity between users (municipal case and farmers) and the treated wastewater reservoir (1000 m) is almost the same as that of the groundwater well water exploitation source for irrigation (1100 m). However, there is no sufficiently productive aquifer groundwater. Furthermore, the surface Nile water pumping into the desert area is too expensive because it is too far away (nearly 450 km from the Nile). It is therefore in this context of absence of alternative resources that the domestic wastewater treatment project is being implemented. In addition, the reuse of treated wastewater is only valid if it meets two conditions in addition to any regulatory constraints, as follows: 1) demand close to the supply of treated wastewater to minimize investments necessary in terms of distribution network and ensure a certain profitability (economic and financial) for the various stakeholders involved. This assumption is considered in the present research study; and 2) compliance with certain qualitative and quantitative criteria of domestic wastewater from Sekem farm El-Wahat both receptacles of water from the treatment plant in a context of respecting the recommendations of environmental protection associations and to meet the future increase in demand for aquifer’s groundwater for municipal irrigation.

2.3 Identification and classification of relevant impacts of the REUSE project

The estimated benefits and costs of a project may vary depending on different assumptions regarding the input data and the methodology applied in the cost-benefit analysis [14],[19]. These costs will have repercussions on social and environmental aspects. To initiate this phase of identification and classification of the existing REUSE project (as a reference case), a set of CBA indicators was developed, following a thorough and in-depth bibliographic synthesis, based on physical criteria relating to the cost of production of the treated water and aquifer, equipment for the water production system and irrigation of non-fruitful trees, and operation & maintenance. There are rehabilitation costs directly induced by the depreciation of irrigation water storage and pumping equipment. The estimation of benefits is linked to the turnover in water production and the savings in water and labor, in relation to the reuse of treated wastewater for irrigation. These benefits will work in favor of the social and environmental returns (particularly the carbon sequestration and improving the micro-climate).

2.4 The lifespan of equipment

Lifespans determine the estimated cost of water when we wish to make comparisons between irrigation methods [10]. The lifespan of the water pump amortization up to the area of the non-fruitful tree was estimated at 30 years. Consider that the water storage and pumping station are constant for the reference situations of the REUSE project.

2.5 Monetize costs and benefits

Data from HUSD partners expressed in euros according to variations of 2023 were collected. This includes data on the costs of equipment, infrastructure, and buildings used to produce treated domestic water and aquifer water for irrigation of non-fruitful trees. Annual repair, operating, and maintenance costs were assumed to be added to the initial equipment investment. Fixed costs are related to insurance, social charges, and advice, on the one hand, and the depreciation of equipment on the other. Depreciation is estimated using the linear relationship. Operation costs (social cost) are linked to the daily activities of workers and vary depending on the working time per treated water production system compared to that of the aquifer and the frequency of irrigation. The cost of labor is the same for both water production systems. The benefits of the REUSE project are the added value of water production and operating costs.

Other costs or benefits, although marketable, are easier to evaluate. Those are in particular the effects induced on the upstream and downstream sectors, for example, on employment. Finally, certain non-market costs and benefits are difficult to monetize, such as non-fruitful tree yield (carbon sequestration and wood production among other benefits), environmental impacts or return, individual satisfaction, … etc. The environmental costs were estimated based on the revenue from drinking water.

In the “reference case”: Sekem Farm El-Wahat region exploits the groundwater aquifer using uncontrolled pumping for drip irrigation of date palm trees, olives, various vegetables, and wood trees. The selling price of groundwater is estimated at 1.5 €/m³ during the year 2023. The cost of producing groundwater could increase by 30% in the next 10 years. The objective is to control and regulate the current use of groundwater in the Sekem El-Wahat region in irrigation (7,200 m³/year). Fertilization requirements could be estimated at 2000 €/year. In this context, the farmers and beneficiaries of the Sekem El-Wahat region will have to face drought seasons requiring them to partially lose their crops by about 1500 €/year. So, the reuse the treated wastewater comes as a priority and sustainable solution.
In the case of the “REUSE project”: The reuse of treated wastewater for the irrigation of the non-fruitful trees (for carbon sequestration), Bamboo trees, and cactus inside Sekem Farm El-Wahat.

The benefit accrues to the community of Sekem El-Wahat is assumed equivalent to the surplus of users of groundwater for drinking purposes. The produced volume of treated wastewater in Sekem Farm El-Wahat is about 14,400 m³/year. The treated wastewater could be sold for 0.5 €/m³. 570 €/ha is the cost of treated wastewater volume in the study region, to which are added numerous additional costs mainly linked to changes in (costs of workers, tillage, soil siltation, depreciation of the irrigation systems parts, … etc.), as well as the cost of energy required for pumping. On the other hand, the REUSE project could reduce its fertilizer expenses by 20% and no longer have any expenses for crop loss or restrictions on use.

2.6 Updating costs and benefits

In this research study, the technical and economic data were processed with EXCEL to produce qualitative estimates of indicators (costs and benefits). These cost-benefit analysis (CBA) indicators are based on net present benefit (NPV) and cost-benefit ratio [10],[12],[18],[19].

Based on the qualitative analysis conducted using Excel calculations, reasonable assumptions, and baseline data shown above, the following economic, social, and environmental costs analysis results can be derived.

3.1 The economic cost

As shown in Table (1), the cost of the initial investment for the production of treated wastewater for irrigating non-fruit trees in Sekem El-Wahat is estimated about 598.4 €/ha. It is lower than the exploitation of groundwater, which is estimated at about 5026.9 €/ha. The difference in economic cost between the two water production methods for irrigating the same crops is about 88%. Furthermore, the REUSE project using treated wastewater allowed for an economic gain of about 4,428.5 €/ha for the Sekem Farm El-Wahat, compared to the exploitation and use of aquifer groundwater for irrigating the same crops [10]. REUSE Project produced inexpensive water supply solution allowing for an economic benefit of about 88% compared to the exploitation of the depleting aquifer groundwater [2],[3]. Thus, the increased use of groundwater as a source of fresh water leads to lowering the groundwater tables and accordingly increasing the pumping costs.

To cope with the recurring periods of drought and limit groundwater withdrawals at Sekem Farm El-Wahat, Egypt, as well as certain countries (e.g. France, Spain, and Italy) are already well mobilized to develop reuse of treated wastewater [2],[3],[10]. However, the transformation towards a circular economy must be inherited into the national water management strategy and plans. REUSE project is considered one of the means to better promote investments in the field of wastewater treatment. REUSE project creates unconventional water resources, making them available to isolated smallholder farmers and desert communities. In addition, it complies with the environmental safeguards.

3.2 The social cost

Table (2) illustrates the social cost comparison of the operation cost of two systems of water production (groundwater and treated wastewater) for irrigation purposes in Sekem El-Wahat-Egypt. Supplying treated wastewater as a feasible solution in rural and desert communities is advantageous and recommended especially for regions where labor for water exploitation is critical. It is a technique where the flow of treated wastewater is used for continuous irrigation without interruption. It does not require high labor costs for the exploitation of water (390 €/ha/year) compared to the cost of labor necessary for the production of aquifer groundwater necessary for the irrigation of non-fruitful trees, which is equivalent to about 6940 €/ha/year.

The REUSE project plays a real springboard for the spread of the circular economy throughout the Egyptian territory and beyond while creating new opportunities, and securing human activities and jobs endangered by the local water deficiency [10]. As a result, the project concept is in favor of securing sustainable job opportunities.

3.3 The environmental cost

In the REUSE project case, the average benefit linked to the environment of region is the development of treated wastewater of about 14400 m³/year (Table 3). The supply of treated wastewater in Sekem El-Wahat reduces the pressure of using aquifer groundwater for irrigation by about 7200 m³/year. Consequently, the benefits of the REUSE project increase the replenishment and availability of the groundwater and pond water in the region, thus contributing to the restoration of the environment (improving groundwater quality and human health by the safe transformation of the wastewater into an opportunity). This will contribute to the recharge of aquifers in the Case of Sekem Farm El-Wahat by about 7200 m³/year, besides avoiding the possible deterioration of groundwater by mixing with the untreated wastewater.

Table 1

Economic costs comparison between two systems (production of treated wastewater and the aquifer groundwater) for irrigating non-fruitful trees in Sekem El-Wahat-Egypt
	REUSE Project Case	Reference Case
	Reuse of treated domestic wastewater	Production of aquifer groundwater
Initial investment of equipment cost (€/ha)	570	4860
Investment cost in installation of water storage (€/ha)	0.39	4.90
Equipment rehabilitation cost (€/ha)	28.0	162
Investment cost (€/ha)	598.4	5026.9

Table 2

The social cost comparison between two systems (production of treated wastewater and the aquifer groundwater) for irrigating non-fruitful trees in Sekem El-Wahat-Egypt
	REUSE Project Case	Reference Case
	Reuse of treated domestic wastewater	Production of aquifer groundwater
Labor cost for operation and maintenance of the storage basin (€ /ha/year)	102	460
Average cost of water for watering green spaces with trees (€/ha/year)	288	6480
Total	390	6940
Additional gain (€/ha/year)	6550	0.0

Table 3

Environmental cost comparison between two systems (production of treated wastewater and the aquifer groundwater) for irrigating non-fruitful trees in Sekem El-Wahat-Egypt
	REUSE Project Case	Reference Case
	Reuse of treated domestic wastewater	Production of aquifer groundwater
Volume of water available (m³/year)	14400	7200
Cost of selling water (€/m³)	0.5	1.5
Cost of water production (€ / year)	7200	10800
Cost of re-cultivation (€/year) 0.0		1500
Cost of fertilization (€/year) 0.0		2000

Table 4

Cost and benefice analysis (CBA) comparison between two systems (production of treated wastewater and the aquifer groundwater) for irrigating non-fruitful trees in Sekem El-Wahat-Egypt
	REUSE Project (treated wastewater for irrigating non-fruitful trees)
Net Present Value (NPV, €/year)	4599
Cost-Benefit Ratio (BCR)	0.44

The estimated cost of producing aquifer groundwater in Sekem farm El-Wahat is about 10,800 €/year compared to that of treated wastewater, which is about 7,200 €/year (Table 3). Substituting the use of aquifer groundwater for irrigating non-fruitful trees helps reduce the cost of energy consumption and offers great financial benefits to isolated and desert communities. It also benefits the environment by reducing carbon dioxide emissions (carbon sequestration), which are a major contributor to global warming. Additionally, reducing fuel consumption as it decreases air pollutants released in case coal, oil, or other fossil fuel sources are burned to produce energy.

The prolonged droughts are becoming more and more common in Sekem Farm El-Wahat region and in the Mediterranean regions in general. Growing competition on natural technologies for unconventional water resources uses, and climate change has especially exacerbated the problems of water shortage (case of aquifer groundwater in Sekem Farm El-Wahat). The unavailability of aquifer water in the Sekem El-Wahat region will contribute to cultivating more greening trees with the cost estimated at about €1,500/year (Table 3). On the other hand, the REUSE project will allow for additional unconventional treated wastewater source, that contributes to improved socio-economic and environmental returns.

In addition, the environmental and health benefits of the REUSE project contribute to reducing the fertilizers application by providing natural nutrients to the irrigation water of non-fruitful trees. However, the case of aquifer groundwater includes fertilizers application estimated at about 2000 €/year (Table 3). Yet, there are marginal disadvantages of reusing treated wastewater [5], such as the REUSE project that must be –if exist- examined and overcome, such as the presence of polluting substances and pathogens (controlled), which implies a potential direct risk for health and the environment; and Indirect risk of accumulation of pollutant agents, pathogens and especially salts present in wastewater.

3.4 Results of cost and benefit analysis

The indicators of the CBA of the treated wastewater reuse (REUSE project) are presented in Table (4). As the treated wastewater cost is about 0.5 €/m³, it was observed that the net benefit (NPV) of the REUSE project is significantly positive at about €4598/year. This means that the benefits of cash inflows are greater than the costs of cash outflows during the first year of the operation of the REUSE project in Sekem Farm El-Wahat. This NPV value is therefore taken as the benefits of the community and the development of the region (isolated rural and desert areas). The REUSE project represents a real interest in implementing more sustainable and resilient non-conventional water management, across the entire value chain by reducing groundwater withdrawals while limiting the costs of wastewater discharge into the groundwater aquifer, nearby watercourses, or ponds.

In addition, the economic efficiency of the cost of the REUSE project is about %44. This BCR value is less than 1.0 indicating that the benefits associated with the REUSE project case during the first year are considered moderate. The REUSE project therefore focuses on the supply side by developing non-conventional water production as well as on the demand side, by proposing a new form of water consumption built on multi-use of the water resources. Therefore, this economic efficiency indicator can be improved by reconsidering the costs and benefits of non-fruitful trees return, and environmental improvement, among other benefits. In addition, it is necessary to take into account the benefits linked to the wastewater treatment co-products (safe sludge usage, energy saving, organic fertilizers, … etc.) maximizing all the positive externalities of this good practice [8],[10].

The reuse of treated wastewater is therefore a practice that is part of the circular economy. It is centered on the idea of reusing and optimizing the available water resources compared to exploiting the aquifer groundwater, extracting additional groundwater wells, transforming wastewater by treatment into a beneficial resource for irrigation purposes, energy saving, switching into organic fertilizers, and positive environmental return. Most importantly, improving the livelihood of the isolated rural and desert communities. The CBA of treated wastewater reuse (REUSE project), as the treated wastewater cost is about 0.5 €/m³ with a net benefit (NPV) of about €4598/year. The economic efficiency of the cost of the REUSE project (Cost-benefit Ratio) is about 44%. The major environmental and health benefit of the REUSE project is reducing the fertilizers application by providing natural nutrients to the irrigation water of non-fruitful trees, on the contrary, the case of aquifer groundwater includes the risk of fertilizers application estimated at about 2000 €/year.

In this research study, the technical and economic data were processed with EXCEL to produce qualitative estimates of the costs and benefits (CBA)’s indicators. It is recommended in the future to use more accurate simulation tools to ensure higher confidence in the results. Also, it is recommended to test several study areas with contrasting physical settings so that the resultant CBA to be more reliable.

Acknowledgement

The present research study is building on the findings of the MED-WET project “Improving MEDiterranean irrigation and Water supply for smallholder farmers by providing Efficient, low-cost and nature-based Technologies and practices” supported by the Partnership for Research and Innovation in the Mediterranean Area (PRIMA) program promoted by Horizon 2020, the European Union’s Framework Programme for Research and Innovation.

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No competing interests reported.

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Cost-benefit Analysis on the Implementation of Treated Wastewater Reuse: Case of Sekem Farm El-wahat, Egypt

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Abstract

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Introduction

Materials and methods

2.1 Description of the study area

2.2 Project Scope and its reference framework

2.3 Identification and classification of relevant impacts of the REUSE project

2.4 The lifespan of equipment

2.5 Monetize costs and benefits

2.6 Updating costs and benefits

Results and discussion

3.1 The economic cost

3.2 The social cost

3.3 The environmental cost

3.4 Results of cost and benefit analysis

Conclusion and Recommendations

Declarations

References

Additional Declarations

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