Multi-criteria decision-making model for basin-wide water allocation based on cost-benefit analysis of social, economy and environmental impact during water scarcity

Rapid urbanization and industrial development are two major factors that contribute to the over-population in a river basin. Studies have shown that changes in the land use of a river basin will caused alterations to the basin hydrology thus forcing changes to the natural water and hydrological cycle. The above would lead to the intensification in water scarcity and cause subsequent increase or decrease in potable water demand depending on the types of social and economic activities of the different sectors or region. For a more efficient and effective management of water distribution, some strategies should be carefully devised to fulfil the demand of the various sectors. Klang River Basin is chosen as the study area for its extensive urbanization, dense population, diverse development with complex social and economic activities. This region is experiencing water deficit which is expected to worsen in the near future. Water prioritization and water allocation are key to the basin water resource management to meet the needs of the sectorial water users. Multi-criteria decision-making (MCDM) is used to address the different water allocation constraints. It takes into consideration the economy, environment, social and water availability of the different service areas in the basin. These factors are quantified into normalized indices for easier analysis and comparison. The economic value is determined by factors like GDP, plot ratio, and land value, while social value is based on population concentration in the built-up area. Environmental and water availability values are derived from the proximity of water intakes to the river mouth and the Water Resources Index (WRI), respectively. An aggregated index is calculated for each service area using at set of weightages (social: 0.4, economy: 0.3, environment: 0.2, water availability: 0.1) determined from stakeholder consultation. Areas with higher aggregated index values is given greater water allocation priority, with Bukit Nanas WTP identified as having the highest priority. The study quantifies the economy and social benefits of water allocation using a logistic benefit function curve, which is validated using historical GDP as a function of water use and questionnaire survey of user perception towards water allocation reduction, respectively. Benefit of environmental water use is a polynomial function that follows the Tennant Montana method. Five (5) water allocation options are then evaluated using the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) to determine the option which yields the highest basin-wide benefit. The options are further analyzed using cost-benefit analysis to normalize the benefit with the cost, measured in terms of the change in WRI. The study concludes that Option 1 provides the optimal water allocation for the basin, with a benefit-to-cost ratio of 2.25, followed by other options with lower ratios. This model serves as a valuable decision-making tool for authorities during water shortages.