Cadiz Breaks Ground on $403M Mojave Pipeline Amid Legal Challenges
Cadiz Inc. has moved its Mojave Groundwater Bank project into construction, setting a $403.3 million capital budget for the Northern Pipeline water conveyance system, ENR reports.
Market Impact
In July, Cadiz affiliate Fenner Gap Mutual Water Co. signed the principal construction contracts under a construction management-at-risk delivery model. Fresno-based W.M. Lyles will build the pipeline pump station, while Mike Bubalo Construction of Baldwin Park will handle repair and prep work on the pipeline corridor itself. Stantec, which came on as owner’s engineer in early 2025, continues in that role.
The project converts a 220-mile idle natural gas steel pipeline into a high-pressure water conveyance line, carrying groundwater from the Mojave Desert to the California Aqueduct north of Los Angeles. It’s one leg of a planned 350-mile network; a second segment would connect the aquifer to the Colorado River Aqueduct. Cadiz pegs the full buildout at $800 million. The company structured the work as a public-private partnership with public water agencies and Native American tribes, including the Lytton Rancheria of California, which has committed up to $50 million as an equity partner. “The public-private partnership business model is the best way to finance critical large-scale water infrastructure today,” said Susan Kennedy, chair and CEO of Cadiz, in a news release. A U.S. Bureau of Land Management decision granting a 50-year right-of-way permit preceded the contract signings, and Cadiz says the ruling opens the door to a $194 million government loan and local financial backing in San Bernardino.
But the same day Cadiz announced its construction budget, two federal lawsuits were filed against BLM over that right-of-way. One suit comes from a coalition of Native American tribes and national parks groups; the other from the Sierra Club and Center for Biological Diversity. Both argue the permit skipped a full environmental review. Opponents contend that pumping 25,000 acre-ft of water annually could deplete groundwater, dry up desert oases like Bonanza Spring, and threaten sacred tribal lands.
What It Means for Subcontractors
- Pipeline corridor and pump station work is already contracted to W.M. Lyles and Mike Bubalo Construction, but the $403.3 million Northern Pipeline package signals more subcontract opportunities in mechanical, civil, and pipefitting trades as the project scales toward the full $800 million buildout.
- Firms bidding into related packages should track the two federal lawsuits against BLM, filed the same day as the budget announcement, since a court-ordered environmental review could delay or halt work tied to the 50-year right-of-way permit.
- The pending $194 million government loan tied to the BLM right-of-way ruling, plus local backing sought in San Bernardino, means financing contingencies could affect payment timelines; subs should build schedule and payment risk into bids given the litigation overhang.
- Water infrastructure subs eyeing the second leg, linking the aquifer to the Colorado River Aqueduct, should watch for procurement details as Cadiz firms up scope beyond the Northern Pipeline segment.
- Companies working with tribal equity partners like the Lytton Rancheria of California, which has committed up to $50 million, should note the public-private delivery model may bring different contracting and approval layers than traditional public agency projects.
