The study develops a framework to analyse a unique natural, environmental or cultural asset that is threatened by a proposal infrastructure development project. The framework consists of the theoretical basis and, a methodology to estimate a decision bound of the “economic value of the asset” and to describe the uncertainty associated with that valuation. To develop the methodology and to analyse impacts on policy objectives of electrical power generation, the decision bound of the “economic value of waterfalls”, the threatened natural assets due to the proposed Upper Kotmale Hydropower Project (UKHP), and a quantification of the risk of that estimation are utilised as the case study.The basic concepts of economic value and the extended benefit cost rule for accepting a project are derived as theoretical bases. The economic value of an environmental resource/ asset is described in terms of its total economic value, and it is demonstrated how the concept of total economic value relates to the waterfalls threatened by UKHP. The contingent valuation method, its use as the only valuation technique to value unique natural environmental or cultural assets, and the theoretical and practical difficulties of contingent valuation in real life applications are highlighted.

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