American water authority wins USD 35M insurance judgement

4 April 2014


Following a four year legal battle, the Southern Nevada Water Authority (SNWA) has won an insurance claim that covers the cost of early problems on its USD 817M third intake project at Lake Mead, in the US.

According to the Las Vegas Review Journal, authority board members were briefed on the USD 35M judgment on in mid-March. An arbitration panel handed down the award in January following more than two years of depositions, document exchanges and deliberations.

"We've pretty much recouped our losses, so we're happy," said Marc Jensen, the authority's director of engineering.

Intake Number Three has been beset by delays and increased costs since construction began in 2009. In 2010, the team excavating the starter tunnel for the TBM hit a fault zone, causing water and debris to flood the work area. The area flooded twice more that year. The floods prompted the authority board to add USD 39.5M to the project's budget, the largest such change order in the agency's history.

The USD 35M the project's insurance carrier was ordered to pay is on top of USD 14.2M already paid out on the authority's claim. Jensen said that basically covers the cost of the 2011 change order, legal costs and interest payments the authority lost out on.