WATER PROJECT COSTS SURGE BY $130M

San Diego’s sewage recycling plan hampered by litigation, inflation

Costs have spiked $130 million for the first phase of San Diego’s Pure Water sewage recycling system because of lawsuits over which workers would build the system and higher costs for steel and other materials during the pandemic.

The City Council this week approved the project’s 12 percent cost increase for Phase 1 from $1.08 billion to $1.21 billion, which comes just as construction of Pure Water’s first phase is kicking into high gear.

Lawsuits filed by contractors delayed by more than two years the city’s plan to seek construction bids for the dozen projects that make up Pure Water, making the contracts more expensive because of inf lation during the pandemic.

City officials helped solve the problem last year by approving San Diego’s first-ever project labor agreement, a union-friendly deal. Pure Water projects are expected to create 4,800 construction jobs.

Even without the delays blamed on lawsuits, city officials say the higher cost of materials would have increased Pure Water’s price tag. They attribute $90 million of the $130 million spike to litigation and $40 million to materials costs.

Construction has begun on most of Pure Water’s key elements, including a sewage purification plant in western Miramar, a pipeline through Clairemont and University City that will bring sewage to that plant, and a Morena Boulevard pump station to make that possible.

A few remaining projects will break ground either this winter or next spring, Shauna Lorance, director of the city’s Public Utilities Department, told the council during a Tuesday public hearing.

Lorance said city officials have also begun preliminary work on the second phase of Pure Water, which