Cadiz sets $403-million construction budget for Northern Pipeline project

(UI) — Cadiz has advanced its Northern Pipeline conversion project into the construction phase after executing principal construction contracts that establish a guaranteed maximum project cost of approximately $403.3 million, providing greater cost certainty as the company pursues financing for the Southern California water infrastructure project. 

The agreements, executed through Cadiz affiliate Fenner Gap Mutual Water Company, use a Construction Manager at Risk (CMAR) delivery model covering the project's primary construction packages, including pipeline replacement and pump stations. The contracts establish guaranteed maximum prices while allowing the company to directly procure long-lead equipment and materials, a strategy Cadiz said is intended to reduce construction cost uncertainty and support financing efforts.

The latest milestone follows the U.S. Bureau of Land Management's approval earlier this month of a right-of-way authorizing conversion of the existing Northern Pipeline from natural gas to water conveyance across federal lands. Cadiz said it has completed the required post-approval filings, including construction notifications and a reclamation bond, allowing the project to move into construction.

Cadiz continues to pursue project financing through a combination of equity, municipal debt and federal infrastructure programs, including a previously announced application for up to $194 million through the U.S. Environmental Protection Agency's Water Infrastructure Finance and Innovation Act (WIFIA) program. The company said the guaranteed maximum price contracts will help support financing discussions while advancing the Northern Pipeline and Mojave Groundwater Bank projects.

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