Project costs for the Lake Powell Pipeline (LPP) have been vastly exaggerated because of inaccurate cost comparisons between LPP and the Southern Delivery System (SDS) water project completed in Colorado Springs, CO in 2016. This information has recently been included in local news stories. As the program director for both projects, I need to point out some flaws and inaccuracies of the comparison created by the Utah Rivers Council to ensure the public has the facts.
Utah Rivers Council grossly over inflated the cost of the LPP by using inaccurate data points and by comparing it to a water project located in another state, with different components, built under widely varying conditions. While there are numerous errors in their calculations, I will point out the three most egregious.
First, they erroneously calculated the SDS pipe cost at $12.5 million dollars per mile. Since I oversaw the construction of SDS and now manage the LPP, I know that number is more than double the actual cost of the pipe components for the SDS or the LPP. That amounts to a $1 billion math error in their calculation for the LPP. They also added $380 million dollars of pipe costs to another one of their cost categories, double counting the pipe costs and bringing the total discrepancy to nearly $1.4 billion on pipe costs alone.
Another significant error involves the rate of inflation used in their calculation. The rate they used (without a citation) is more than double the rate of the U.S. Bureau of Reclamation’s Construction Cost Trends index for steel pipelines – the standard for water pipeline projects.
Finally, the citation for their claim that tariffs will add approximately 6.6 percent to the project cost is an article about new “nonresidential buildings” tariffs – not a large public infrastructure project. I doubt even our well-informed leaders in Washington can predict the geopolitical climate that would impact tariffs in the timeframe in which the LPP would be built.
The claims about inflation and tariffs inappropriately inflate their cost estimate even further.
You can’t build a water project in the west without someone opposing it. The same arguments that were used against the SDS are now being used against the LPP. Opponents of SDS asserted that project would cost $2.2 billion, but we finished the project on time and $160 million under budget for $825 million. We are working to incorporate the same project management approach and cost saving measures for the LPP.
At a projected cost of between $1.1 and $1.8 billion, yes, the LPP is a big investment. And those of us managing the project need to be exceptionally careful and prudent financial stewards. But it is a disservice for an environmental special interest group located in Salt Lake City to present faulty cost information when the water security and economic stability of 13 southern Utah communities is at stake.
John Fredell
Program Director
