Multi-region Water Supply(MRWS) Project aims to serve stable water supply to several local governments by securing sources of water supply including multipurpose dams. MRWS had been sharply increased since 1980, the beginning of its service. However, MRWS facilities have been excessively built since 1990s. Moreover, local water supply facilities have been built in areas where MRWS could cover. As result, utilization rate of MRWS drop below 50%.

This paper evaluates MRWS Project focusing on the matters of water demand forecasting and cost allocation. According to the research, the demand for water is overestimated by pumping up the future population on the drawing board of MRWS Project. This overestimated demand is caused not only by wrong estimating method but also by systematical problems related to water supply. Current MRWS system enables local governments or the Korea Water Resources Corporation to excessively built MRWS facilities by offering biased economic incentives. It is found that problems related to cost allocation system are the critical causes of this overinvestment.

For the conclusion, several alternatives are suggested to solve the problems. First, MRWS should be built by local governments’ joint investment. Second, conditions of local governments should be taken into consideration to decide the share of cost allocation. Third, increased cost caused by overinvestment should not be included in calculating the charges of water supply. Fourth, a fine could be levied on local governments of which utilization rate of MRWS is seriously low.