Water to be valued as a separate resource for the first time

Posted: Tuesday 25th January 2011

“Water is life's mater and matrix, mother and medium. There is no life without water” said Albert Szent-Gyorgyi,HungarianBiochemist, and 1937 Nobel Prize winner for Medicine.

In 2011 it is apparent that the world’s demand for a supply of clean, fresh water is steadily increasing, threatening water and food security around the globe. On 17th January 2011 the first steps to address the value of water are being taken by one of the UKs leading valuers in rural assets. Hugh Fell FRICS, will deliver an Information paper on a Methodology for the Valuation of Water at the Royal Institution of Chartered Surveyors in London.

This is the first time the valuation of water, as a separate asset, has been addressed and it will serve as a starting point for national and international discussion on the economic value of water, both from a natural source - a river, lake, groundwater or reservoir –or from a statutory provider.

Although the formal valuation of water is a new concept, and there is currently no comparable evidence, transactions or appraisals from which to draw assistance, the basic principles of valuation still apply. It is hoped that as the practice of valuation of water resource becomes more common, so will the process become easier and more widely accepted.

Hugh Fell will address the valuation of water from a theoretical point of view but he will also use examples to illustrate his methodology such as:

· Two identical 500 acre blocks of free draining, light land. One has a 25,000 m3 gallon reservoir; the other has no access to water for irrigation. What is the difference in value?

· A 75,000 m3 lake set in an area of high landscape value with strong tourism links. What is the value of this resource?

· Two identical hotels in Africa. One has an extensive, reliable, private supply -the other suffers shortages from the local ‘public’ system. What is the difference in value?

Hugh Fell says: “Water is the most important, yet undervalued finite resource on the planet. It is used for agriculture, drinking, health, and industry, and without it there would be no life on earth. Yet despite this, water is undervalued and used unsustainably. The RICS has rightly recognised the large gap in their valuation armoury and commissioned this important paper.

“Water in the UK is something that has largely been taken for granted. On a day to day basis it is simply there for our disposal world-wide. This paper is the first draft of a methodology that the RICS expects will evolve through discussion and feedback and will ultimately lead to the importance of water throughout the world being more appreciated and therefore better managed.”

During the course of Hugh Fell’s work, he became sufficiently inspired by the subject of water as a separate resource that he set up a subsidiary company, Water-Value, which aims to engage property owners, politicians, investors and environmental groups in the need to understand and value water as a separate resource. Water-Value has been established to fill the gap in this specialist area. For more information, please go to http://www.water-value.com/

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