California’s Delta Water Tunnel Is a $15.9 Billion Money Pit

As we noted, the economic rigors brought on by the pandemic failed to halt the massive underground tunnel that would pump water from the San Joaquin Delta to central and southern California. The original “WaterFix” was a pet project of Gov. Jerry Brown and called for two tunnels. Rebranded the “Delta Conveyance Project,” it will now cost $15.9 billion, according to the latest estimate, almost as much as the $16.7 billion price tag for the two-tunnel version.

According to a Fresno Bee report, the Delta Conveyance Project is “an attempt to shore up the reliability of critically needed water deliveries to the south state while improving the fragile ecosystem of the Sacramento-San Joaquin Delta.” The tunnel project will “intercept the Sacramento River just south of the city, divert a portion of the water into an underground tunnel and pipe it directly to the pumps.” As the report notes, “some environmental groups agreed to consider the new plan, but the downsized project still faces considerable opposition.”

If taxpayers wonder about surging costs, they might look back at the original project.

The Unexpected Complexity of the California WaterFix Project Has Resulted in Significant Cost Increases, a report from California’s State Auditor published in 2017, pegged the planning costs alone at $280 million. The audit found that the state Department of Water Resources “did not follow state law when it replaced the program manager for the conservation and conveyance program.” The DWR selected the Hallmark Group “without advertising a request for qualifications,” and “the cost of DWR’s current contract with Hallmark has tripled from $4.1 million to $13.8 million.”

Consider also the new span of the San Francisco–Oakland Bay Bridge, which came in $5 billion over cost, ten years late, and riddled with safety issues. With original estimates at $1.3 billion, a final figure in the range of $30 billion for the Delta Conveyance Project is not out of the question. Taxpayers will be hard pressed to find a government project of this magnitude that came in under cost and on time. Meanwhile, the current pandemic has also failed to lock down spending on California’s vaunted high-speed rail project.

Editor’s Note: Also please see the Independent Institute book, Aquanomics: Water Markets and the Environment, edited by B. Delworth Gardner and Randy T. Simmons.