The Inspector General's office of the Department of Interior says costs have soared so high on the $635 million Animas-La Plata water project that it is "economically infeasible." That pronouncement was made in a draft report addressed March 14 to U.S. Bureau of Reclamation Commissioner Dan Beard on the controversial dam-and-irrigation project proposed for southwestern Colorado (HCN, 3/22/93). The report recommends that the Bureau drop as much as $230 million from the project, including the irrigation portion, which auditors say would carry water too expensive for many farmers to purchase. It also suggests that the federal government ask two Indian tribes - the Southern Ute and Ute Mountain Ute tribes - if they would be willing to accept cash or other compensation in exchange for dumping the federal irrigation improvements promised them.