Demand for water is increasing day by day due to population growth and increasing economic activities. Climate change, as a potential threat to both water supply and demand, has upset the balance between water resources and consumption, especially in arid and semi-arid countries. The result is a widening gap in water supply and demand, increasing social conflict, and the instability of aquatic ecosystems and the environment. Water resource planners in many parts of the world have come to the common understanding that conventional water resources alone can no longer bridge the gap between supply and demand and should focus on water resource planning where different options of development of water resources are available. In the meantime, the use of unconventional water resources as a promising option to alleviate the quantitative and qualitative pressures on conventional water resources worldwide is of particular importance. Unconventional water resources mainly include seawater, brackish water and effluents from drinking, industrial and agricultural uses, of which seawater desalination is of particular importance.
However, exploiting these resources is economically and financially challenging due to their high costs. Therefore, it is necessary to carefully consider the opportunity cost of water supply in this way with the its benefits. In this paper, using economic analysis based on welfare theory, which is widely accepted as a decision-making framework in the selection and implementation of investment projects. For economic evaluation, the overall effect of the project on improving the economic well-being of the whole community is measured by estimating and comparing the collective benefits of the project over time. If the economic benefits of the project outweigh the costs, it means that the value of consumption created for the community as a result of the project is greater than the value of the resources sacrificed for the project by other uses. In this paper, the Persian Gulf Water Desalination and Transfer Project, which is being implemented to supply water to the mining industries in southeastern Iran, gross water supply benefits by the project are estimated based on its final production value (economic value) in consumer industries are evaluated against the investment, operation and maintenance costs of both parts of project, namely desalination and water transfer. The results of the net present value of the project indicate that the benefits of water supply for the mining industries in the southeast of the country through desalination and water transfer from the Persian Gulf is not only able to compensate all investment, operation and maintenance cost and cost opportunity money, but also can add a total of 59,127.2 billion rials to the economic welfare of society during the 30-year period of operation. It should be noted that the internal rate of return of the project is 22.3%, which is significantly higher than the basic discount rate (0.07). On the other hand, in order to attract private investors to invest in this field, projects in this field must have financial stability. Therefore, the economic evaluation of the project should include an analysis of the financial sustainability of the project from the perspective of stakeholders. The financial analysis of the project is similar to the economic analysis in form. Both evaluate the benefits of investing. However, the concept of financial gain is not the same as economic profit. As mentioned above, in economic analysis the effects of the project on the national economy or the welfare of the community as a whole are measured, while in financial analysis the profit of the project is estimated for the operator or project participants it becomes. For a project to be economically viable, it needs to be financially sustainable and economically viable. The financial instability of the project leads to the non-realization of its economic benefits. Indeed, a comprehensive economic analysis should answer the question of whether the project's financial costs are covered by its beneficiaries and whether there is a financial incentive for project participants. The basic test for evaluating a financial sustainability project is whether the financial project for repayment is too much of the participants' capital. The Persian Gulf water desalination and transfer project is implemented by the private sector; where 15% of the required investment capital is brought from the investor and 85% is financed by BOO method. According to the agreement between the private investor and the water-demanding industries, the (financial) price of selling each cubic meter of desalinated water on the place of the industries is based on the cost (financial) of both components, the desalination and the transfer of each cubic meter of water plus 30 Percentage of profit margin is determined. Accordingly, the financial income of the project is calculated by multiplying the selling price of each cubic meter of water by the amount of water allocated to different industries. The financial criteria of the project indicate the very good profitability of the project from the perspective of the private sector investor. According to the calculations, the financial rate of return of the project is 30.9% and the rate of financial return brought by the investor is estimated to be 33.2%, both of which are significantly higher than the cost of capital opportunity (interest rate of the facility, 19% for Rial loan and 7/7% of foreign currency loans). Therefore, it can be concluded that the implementation of the Persian Gulf desalination and water transfer project to supply the water needed by the country's mining industries has an economic justification. The economic benefits of supplying water through seawater desalination to meet the needs of the mining industries can cover the high costs of desalination and water transfer and justify its implementation from the perspective of the national economy, the financial sustainability of the project also indicates the existence of sufficient financial motivation for the private sector to participate in investment projects for desalination and seawater transfer projects with industrial and mineral use.