The Milagro Project currently provides dry season water to over 7,000 hectares of mixed crops in the Guayas Basin and there are plans to double its size. Water users bear the cost of project construction and maintenance through a system of fixed fees per hectare. The users must also bear the cost of investment in their own on-farm irrigation systems. The object of the study is consideration of the profitability of private investment in on-farm irrigation capital before public funds are committed to project enlargement. The relative profitability of such private investments among tenure classes is also a consideration. A comparison, by tenure class, of returns to area farmers without irrigation vs. those having supplemental water indicates internal rates of returns are associated with the larger size farms. A test of the sensitivity of these results to a range of yields, prices and costs reveals that, for all tenure classes, the internal rate of return remains well above 12% except in the most pessimistic of simulated production conditions.