Cadiz water storage project
The project, which was expected to be a partnership between Santa Monica, Calif-based Cadiz and the Metropolitan Water District of Southern California, was to generate an estimated $500 million to $1 billion in revenue for the company over the next 50 years, The Los Angeles Times reported Wednesday.
Cadiz described the project as the only California-based storage and supply project along the Colorado River Aqueduct to receive all of its federal environmental approvals. The Los Angeles Times reported that the cancellation of the project comes as the company has an interest payment of $7 million due to bondholders within a week. A bank loan of about $35 million is due at the end of January, according to The Times.
While the Metropolitan staff recommended to approve the project, the District's board elected not to proceed with it. Cadiz said it was evaluating its options following the water district's decision, and said it believed the program was viable and would continue to pursue it.
Cadiz said the district board's rejection is contrary to the opinion of the Department of the Interior, Bureau of Land Management, County of San Bernardino and other governmental agencies, all of which have favored the project and granted all approvals and permits. The company called the vote "astonishing since it was without the benefit of any hearings or briefings on the current environmental safeguards approved by the Department of the Interior or status of the contractual negotiation process." "We firmly disagree with Metropolitan in that we believe the decision ignores both the letter and spirit of Metropolitan's contracts with Cadiz, which collectively obligate Metropolitan to complete the environmental review process and turn the entitlements over to its venture partner Cadiz," Keith Brackpool, Cadiz Chairman and Chief Executive Officer, said in a prepared statement.