en.Wedoany.com Reported - Fenner Gap Mutual Water Company ("Fenner Gap"), an affiliate of Cadiz, Inc., has executed major construction contracts for the Northern Pipeline Conversion Project ("Northern Pipeline") using a Construction Manager at Risk (CMAR) delivery model, establishing a guaranteed maximum price for major construction components, including pump stations and pipeline replacement. These agreements, together with pricing for owner-procured equipment and materials, as well as purchase options and supplier quotes for other components, establish an estimated capital expenditure of approximately $403.3 million required to bring the Northern Pipeline into operation.
This CMAR delivery structure provides a contractual guaranteed maximum price for the project's major construction packages while allowing the company to directly procure major long-lead-time equipment and materials. This approach is designed to reduce construction cost uncertainty, maintain competitive flexibility in procuring major equipment and materials, and establish a clear construction capital budget for the company's project financing activities for the Mojave Groundwater Bank.
Previously, on July 10, 2026, the U.S. Bureau of Land Management (BLM) approved a right-of-way grant authorizing the construction, conversion, and operation of the Northern Pipeline for water conveyance on federal lands. Following the right-of-way grant, the company completed routine BLM submissions, including payment of reclamation bonds, construction notices, and other required documents.
Earlier this year, San Bernardino County and Fenner Gap established the San Bernardino Water and Power Authority, a joint powers authority, to support the planning and development of water and energy infrastructure projects. The authority is expected to play a key role in project financing through the issuance of municipal bonds and other debt instruments.
The company continues to advance efforts to secure equity capital, municipal debt, and federal infrastructure financing. The CMAR contracts are expected to support these financing activities, including the company's previously announced application for up to $194 million in funding through the U.S. Environmental Protection Agency's Water Infrastructure Finance and Innovation Act (WIFIA) program.
Reducing construction risk through the guaranteed maximum price is also expected to advance ongoing discussions with potential equity investors. These contracts also establish a benefit-sharing mechanism to incentivize construction partners to further reduce the project's total cost.
Cadiz, Inc. is a water solutions and natural resources company that develops long-term water supply, storage, conveyance, treatment, and solutions for communities, businesses, farmers, and public agencies in the Southwest. Founded in 1983, the company owns approximately 45,000 acres of land and 220 miles of pipeline assets in the Mojave Desert of California, including the Cadiz Ranch, the Mojave Groundwater Bank, and ATEC Water Systems.
