ECONOMIC VALUATION AND FINANCIAL SUSTAINABILITY IN STORMWATER MANAGEMENT: A CASE STUDY OF THE PONTE ALTA CREEK, TABOÃO DA SERRA/SP

Abstract

This study analyzes the economic feasibility of the Ponte Alta Creek Linear Park in Taboão da Serra (SP), evaluating its role as a Nature-Based Solution (NBS) for urban stormwater management. The methodology is based on Cost-Benefit Analysis (CBA), employing indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-Cost ratio (B/C), and Simple Payback. The assessment considered two annual discount rates (5% and 8%) focusing primarily on water resource benefits, such as flood mitigation and avoided costs in water treatment. The results indicate that the project is economically unfeasible under the conditions analyzed. For both discount rates, the NPV remained negative (reaching -R$ 1,205,173.88 at 5%), and the B/C ratio was below 1.0. The estimated IRR of 1.36% was lower than the cost of capital, while the Simple Payback of approximately 183 years significantly exceeded the project's 30-year lifespan. These findings are attributed to the exclusion of intangible social and environmental benefits due to data limitations. The study concludes that while NBS offers vital ecological services, traditional financial models may not fully capture their value, requiring improved valuation methods for multidimensional benefits to justify public investment.