Contractors haven't paid off Central Valley Project yet
02/20/2014 1:02 PM
02/20/2014 4:00 PM
Re "Water contractors get a financial jolt (P A10, Feb 20): I encourage The Bee to dig a little deeper beyond the Standard and Poors report.
Who really will pay for the proposed twin tunnels? The federal contractors have yet to pay off the federal Central Valley Project, and hence they won't pay off the tunnels. Reclamation law allows them to pay the debt without interest, and based on their ability to pay. For us, this will be similar to living in your grandfather's house, and paying $30 a month in mortgage payments.
A 1996 GAO report (http://www.gao.gov/archive/1996/rc96109.pdf) explains in Appendix I (p. 32) "Changes in Reclamation Law Regarding Allocation of Project Costs and Repayment Requirements." First the deal was repayment in 10 years, then 20, then 40, then 50 years, and finally based on a vague "ability to pay."
Even with this assistance, the Central Valley Project is not repaid.
-- Peter Jacobsen, Sacramento
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