August 2, 2005

Nevada moves toward $5 bln Las Vegas water project

By Jim Christie

SAN FRANCISCO (Reuters) - Nevada may be near a deal that
would clear the way for one of the most ambitious water
projects in the arid U.S. Southwest since the Hoover Dam -- a
$5 billion network of wells and pipelines to bring water to the
booming Las Vegas area.

The agreement would allow the Southern Nevada Water
Authority to proceed with its plan for a $5 billion water
project, including 500 miles of pipelines, to meet the
increasing demand for water in the booming Las Vegas area,
authority spokesman J.C. Davis said on Tuesday.

"If it occurs, it'll likely occur in the next couple of
months," said Davis, referring to the anticipated deal with the
Nevada's Lincoln County to share the project's infrastructure,
which would be financed with bonds backed by user fees.

An agreement would allow the authority to begin an
environmental analysis of the project to bring water to Las
Vegas, one of the fastest-growing metropolitan areas of the
United States.

The desert city and its surroundings in future years will
need to draw water from additional sources, and planners at the
authority see wells hundreds of miles north providing it.

They envision drilling up to 195 wells and building pump
stations, power lines, a reservoir, treatment facilities and up
to 500 miles of pipelines to deliver water to Las Vegas, which
draws 90 percent of its water from the Colorado River.

"We're trying to reduce our reliance on the Colorado River
and spread out our water options," Davis said. "It also will be
used to meet projected demand because people continue to move
to southern Nevada."

The Las Vegas area gains a net 3,000 to 4,000 new residents
each month, increasing demand as new communities spread into
the desert, according to home builders.

"Last year we sold a record 30,000 new homes," said Monica
Caruso of the Southern Nevada Home Builders Association. "We
have to continue planning and preparing for growth."

Home builder KB Home expects Las Vegas to be one of its
best markets for the foreseeable future. It builds and sells
about 4,000 homes there annually and expects its local
production will rise to 4,500 in coming years.

"We think the market will be there," said Jim Widner,
president of KB Home's Nevada division.

Business forecasters share that view.

The Las Vegas area's population is projected to double to
3.6 million by 2035, keeping water among the region's top
concerns, said Keith Schwer, director of the University of
Nevada, Las Vegas' Center for Business and Economic Research.

"I'd go back to Mark Twain, who said, 'Whiskey is for
drinking. Water is for fighting over,"' Schwer said.

The construction of the Hoover Dam southeast of Las Vegas
on the border between Nevada and Arizona during the 1930s
transformed the U.S. Southwest, taming the Colorado River and
providing electricity that helped the region develop.