Bay Delta Conservation Plan Total Could Be As High as $67 Billion

By Dan Bacher | December 28, 2013 | The total cost of the Bay Delta Conservation Plan to build the peripheral tunnels could be a...

By Dan Bacher | December 28, 2013 |

The total cost of the Bay Delta Conservation Plan to build the peripheral tunnels could be as high as $67 billion, according to new figures revealed at a Westlands Water District board meeting last month by a Westlands staff member and a Citigroup bond consultant. 

This new figure, with construction bond costs included in the total, counters the claims by Brown administration officials over the past two years that the plan would cost $24.5 billion during its 50-year implementation period. 

In Paul Rogers' article in the San Jose Mercury News on December 26, Mark Cowin, director of the state Department of Water Resources, confirmed the estimates are accurate.

"The assumptions they've made are reasonable," he told the paper. "But financing is confusing. There isn't any doubt about it. It's hard to relay information that the public understands. We need to be clear that if you add up the total debt service, that's a different type of calculation than the capital cost estimate. I would hope those two types of estimates aren't confused." 

The Westlands presentation looked at three scenarios, with each considering bonds issued for 30 years at 5 percent interest. 

“They pegged the cost to build the tunnels at $18 billion, and overall cost with financing at $42 billion to $58 billion,” said Rogers. 

"When the $9 billion more in wetlands restoration, monitoring and other costs are included, the grand total is $51 billion to $67 billion," the article stated. 

Governor Jerry Brown is currently fast-tracking the construction of two 35 miles long tunnels, each 40 feet in diameter, under the Delta. A 120-day public review and comment period for over 40,000 pages of documents in the plan and EIS/EIR began on December 13. 

The latest estimate provided to Westlands is the highest to date. A previous estimate, compiled by Restore the Delta from the figures provided by the Bay Delta Conservation documents, revealed the total cost would be $54.1 billion. 

That figure included $14.5 billion for construction, $1.5 billion for O&M (operation and maintenance), $26.3 billion for Interest on tunnel revenue bonds, $7 billion for habitat and conservation, $3.2 billion interest on general obligation bonds, and $1.6 billion for administration and research. 

RTD's economic analysis came up with an amount similar to the estimate of $53.8 billion made by economist Steven Kasower of the Strategic Economic Applications Company in August 2009. Kasower's draft economic report was released to California Legislature prior to passage of the water policy/water bond legislation that cleared the path for the construction of a peripheral canal or tunnels. 

His $53.8 billion estimate was based on a combination of $33 billion for a conveyance tunnel and $9.8 billion for through Delta conveyance, in addition to $2 billion for mitigation, $4 billion for restoration, and $5 billion for off-stream storage. 

"This latest estimate of the BDCP's total costs makes it clear the project is a financial loser even when you use the administration's own flawed benefit-cost analysis," said Tom Stokely, Water Policy Analyst for the California Water Impact Network (C-WIN). 

The latest estimate of $67 billion only underscores the absurdity of the Governor pursuing the twin tunnels as a monument to his "legacy." The plan is absurd for a number of reasons besides the enormous cost of the project: 

• The tunnels don’t provide any new water – but will only end up diverting water from senior water rights holders to junior water contractors. 

• The project will hasten the extinction of Sacramento River winter run Chinook salmon, Central Valley steelhead, Delta and longfin smelt, green sturgeon, sandhill cranes other species, as well as imperiling the salmon and steelhead and salmon populations of Trinity River. 

• The plan will take massive acres of fertile Delta farmland, among the most fertile on the planet, out of production in order to continue to irrigate drainage-impaired land irrigated by corporate agribusiness interests on the west side of the San Joaquin Valley. 

• Finally, the project will increase water bills and property taxes for Los Angeles residents from $2,000-$4,500 per household. This “twin-tunnel tax” would not bring any new water to Los Angeles. 

An independent cost-estimate of the tunnels done by ECONorthwest for Food and Water Watch and the California Water Impact Network shows that LADWP would need to increase water bills from $7-15 per month for over 40 years or $2000-$4,500 per household to fund its cost share of the tunnels, according to Adam Scow, California Campaign Director of Food and Water Watch. 

Fishermen, environmentalists, Tribal leaders, family farmers, Delta residents, Southern California water ratepayers and elected officials from across the political spectrum have united to stop Jerry Brown’s peripheral tunnels, as evidenced by a large protest at the State Capitol on December 13 that drew over 400 people. 

As Bill Jennings, Executive Director of the California Sportfishing Protection Alliance, said in his speech: 

“We will not allow our fisheries, farms, communities and future prosperity to be sacrificed to enrich a south valley industrial agriculture, that comprises 3 tenths of 1% of our state economy, and is predicated upon embezzled water, massive public subsidizes, unrestricted pollution and subsistence wages. 

We’ll fight this abominable scheme through the administrative halls, the courtrooms and the ballot box. 

If necessary, we’ll fight on the channels and sloughs and on the levees and through the fields - to the very gates of hell. 

We shall never surrender our Delta.” 

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