homepage home
subscribe to Southwest Contractor magazine subscribe
newsletters free e-newsletter
advertise
industry jobs industry jobs
Mcgraw Hill Construction
Southwest Contractor Logo
Order Your RISK FREE Subscription
comment

Lake Mead Intake Project Wins Insurance Award, Recoups Costs

Text size: A A

----- Advertising -----

It’s smart to hedge high-risk bets, especially in Las Vegas. The Southern Nevada Water Authority did just that by buying a builder’s risk policy prior for the $817 million third intake project at Lake Mead. Backed by a half dozen reinsurers, the policy offers up to $650 million in loss coverage on a $10 million premium. The water authority bought it from Lloyd’s of London through Marsh LLC, New York City, after a year of discussion and research.

Insurance proved a prudent bet as the project has grappled with flooding delays, cost overruns and a worker fatality. The agency last month revealed a $35 million insurance award after an arbitration case, consisting of two years of depositions, documentation and deliberations. That comes atop a prior $14.2 million insurance payout. The money helps defray unexpected project expenses that include a $39.5 million change order in 2011.

“We don’t typically purchase insurance policies for construction projects,” says SNWA engineering project manager Erika P. Moonin. “But this was underground job, so we handled it differently."

The water authority knew it would be a tough job, which is why a $40 million contingency cushion was built into the project budget. Those monies have yet to be exhausted. The undertaking calls for a three-mile-long tunnel that will draw water from 860 ft., deeper than the two existing Lake Mead intakes which could soon run dry amid a crippling drought ravaging the west. Southern Nevada has seen lake levels plummet 113-ft. since 2000, leaving the region’s main water source half full.

Vegas Tunnel Constructors LLC, as a result, began work on a deeper lake intake in 2008 as an insurance policy to keep water flowing. The design-build contractor, a joint venture of S.A. Healy Co., Lombard, Ill., and Impreglio S.p.A., Sesto San Giovanni, Italy, is using a custom-built $25-million Herrenknecht tunnel-boring-machine to carve-out a 20-ft-dia tunnel lined with 2,500 concrete rings. Each ring is made-up six 17-ton precast segments that form 6-ft. of tunnel.

The project has seemingly overcome early hurdles, namely repeated flooding between 2010 and 2011 that ruined some mining equipment. The joint-venture team, which includes geotechnical consultants Brierley Associates LLC, Denver, and Arup, New York, spent months pumping out water and stabilizing rock fractures with grout. It eventually abandoned a 200-ft-long starter tunnel and drilled a drier direction. Construction has seeming hit its stride, with the tunnel reaching 58% completion, Moonin says. However, work is nearing a worrisome area that passes 50 ft. underneath the old Las Vegas Wash channel, now at the bottom of Lake Mead.

Barring any additional incidents, the project should finish in the summer 2015 or about two years later than initially planned. Other affiliated work, done under separate contracts by different firms, has progressed more smoothly, including a 600-mgd pumping station; a 14-ft-wide, 16-ft-tall connection to the second intake; a 120-in.-dia. discharge pipeline from the pumping station to the 600-mgd Alfred Merritt Smith Water Treatment Plant; and, a large power substation and lines.

Keywords:

----- Advertising -----
Dodge Reports

Below is a brief listing of Projects Bidding in the South West. Click on any project to get Dodge Report, Plans and Specifications.

Click Here to See More Projects in the South West

Blog: From multiple ENR Southwest Bloggers
Our new blog delivers the latest project and people news, opinions and insights from the jobsite to the boardroom from the editors.
Reader Photos
Photos from Southwest Contractor Photo Showcase
Dodge Lead Center
Search for local construction projects OR CALL 877-234-4246 and get a FREE Lead Now!
Search by Project Type & State





----- Advertising -----
 Reader Comments:

Sign in to Comment

To write a comment about this story, please sign in. If this is your first time commenting on this site, you will be required to fill out a brief registration form. Your public username will be the beginning of the email address that you enter into the form (everything before the @ symbol). Other than that, none of the information that you enter will be publically displayed.

We welcome comments from all points of view. Off-topic or abusive comments, however, will be removed at the editors’ discretion.