DALLAS - After wrapping up negotiations for a $3 billion privately operated pipeline, the San Antonio Water System is seeking approval from its board of trustees and the City Council before the end of the year.
The SAWS board will consider the terms of the proposal with the Vista Ridge Consortium at its Sept. 22 board meeting.
SAWS Chairman Berto Guerra, who led negotiations, said he hopes to have the deal presented to the San Antonio City Council by Thanksgiving.
SAWS officials have urged Abengoa, the international environmental and energy conglomerate leading the consortium, to pursue cost reduction while building the 140-mile pipeline system, according to the San Antonio Express-News.
Vista Ridge would finance the debt for the pipeline through a special purpose issuer, officials said.
The cost of the water to be piped from Burleson County east of Austin is projected at just over $2,200 per acre-foot in 2020 and increasing to about $2,600 in 2050.
Guerra said that "in 30 years, it'll be the cheapest water around," according to the Express-News report.
Vista Ridge would be responsible for building the pipeline from Burleson County to the SAWS reservoir. SAWS estimates that the private company could provide up to 20% of the city's water.
The city expects to increase water rates to pay for the project.
In previous discussions, SAWS officials said that they were able to reduce Vista Ridge's original proposed cost by $700 million.
Vista Ridge, one of nine companies that submitted proposals, agreed to assume complete delivery risk, including regulatory, technical and financial risk at a fixed price for the 30-year duration of the project, officials said.
To negotiate the contract, the SAWS Board formed a committee whose meetings were open to the public. The first negotiation session took place on July 1, the very afternoon the project was selected.
San Antonio has more than 1.4 million residents and SAWS projects its customer base will grow at a rate of 20,000 people per year.
The project will require rate support for payments that would be scheduled to begin upon delivery of water as early as 2019.
Abengoa is a 70-year-old global infrastructure company that supplies drinking water to more than 6 million residents around the world. The company has completed more than 50 pipeline projects with total investments of more than $20 billion.
SAWS carries ratings of AA-plus from Standard & Poor's and Aa1 from Moody's Investors Service on its senior-lien revenue bonds. San Antonio's general obligation bonds are rated triple-A.
