Escalating well construction costs in South Florida significantly exceed ENR construction cost index

The South Florida Water Management District (SFWMD) develops long-term, comprehensive regional water supply plans to provide for current and future water use. The use of alternative water supplies is extremely important to the development of future water supply in South Florida. Alternative water supplies include brackish water sources that must be converted to potable water using desalination technology. CDM, under contract to SFWMD, has examined the cost of brackish water wells into various aquifers, as well as the injection of the concentrate from reverse osmosis processes into deep injection wells. In the course of this study it was found that well construction costs for alternative water supplies are escalating rapidly and were outpacing construction cost projections made by escalating previous costs using the Construction Cost Index from the Engineering News Record (ENR CCI) during the past two to three years. There are many reasons for this including the impacts of recent hurricanes impacting South Florida in 2004 and 2005; competition among a limited pool of drillers as more emphasis has been placed on alternative water supplies; increases in the cost of materials such as PVC, steel, and cement; and increases in labor costs.

Chapter 373, Florida Statutes (F.S.), requires the SFWMD to prepare water supply plans for regions where projected water demands have the potential to exceed available supply over the next 20 years during a 10-year drought. The SFWMD develops regional water supply plans for all the basins within its jurisdiction and updates these plans every five years. In addition, as part of the SFWMD's mission to promote development of alternative water supplies, grants are offered to entities seeking to develop cost-effective, safe and appropriate alternative water supplies. Current development costs of alternative water supply well options are used to evaluate these proposals.

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