Consortium, Loan Announced for Fargo Flood Project

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BISMARCK, N.D. (AP) — A $2.75 billion project aimed at protecting Fargo and Moorhead, Minnesota, from chronic flooding gained ground Friday with the acceptance of a massive federal loan and the pick of a international consortium to build a key piece.

The public-private partnership that will build a channel to divert Red River floodwaters around the region is a first for the U.S. Corps of Engineers and could be a model for big infrastructure projects elsewhere, local officials said in announcing the consortium, called the Red River Valley Alliance. It consists of Spain-based Corporacion Acciona Infraestruras S.L., Israel-based Shikun & Binui Ltd., and Canada-based North American Construction Group Ltd.

Officials also said the Environmental Protection Agency will provide a $569 million low-interest loan for the flood-control project, which also includes levees and other structures to control water levels.

Three cranes are in place to help workers with construction of a water control structure southwest of Fargo, N.D., on Thursday, June 17, 2021. The inlet is part of a 30-mile Red River diversion project that will likely cost $3 billion by the time it’s finished in 2027 or 2028. (AP Photo by David Kolpack)

Fargo Mayor Tim Mahoney called the announcements important milestones in protecting North Dakota’s largest city, which has dealt with chronic flooding for decades due to the area’s flat topography.

“It’s the last piece needed to provide once and for all permanent flood protection,” Mahoney said.

The idea for the 30-mile (50-kilometer) diversion channel gained momentum after a record-setting 2009 flood that destroyed about 100 structures and caused millions of dollars in damage. Fargo _ a city of 122,000 that sits lower than Moorhead and just across the Red River from the Minnesota city of 43,000 _ was saved only by an effort involving 7 million sandbags and 100,000 volunteers. Fargo’s hopes for one day shutting down its so-called Sandbag Central for good depend on the diversion channel.

The consortium will provide $560 million in up-front capital, and ultimately will be reimbursed for the diversion project’s total cost of about $870 million, said Joel Paulsen, the executive director of the diversion project. The alliance also will be paid $32 million for 30 years to operate and maintain the channel, he said.

Other major funding sources for the overall project include $750 million from the Corps and a $435.5 million bonding bill approved by the Legislature this year. A Fargo sales tax will raise about $45 million annually.

Mahoney said the partnership expedites construction on the diversion channel, which has already begun on two inlet structures south of Fargo. It also frees up federal dollars for other infrastructure projects nationwide and will spur economic development because companies can be assured the area is protected, he said.

“With these measures in place, it will make us boom even more,” Mahoney said in an interview.

Republican Gov. Doug Burgum said the project, when completed in 2027, would protect some $20 billion in property.

Howe Lim, a civil engineering professor at the University of North Dakota, said four of his former students have worked on the project. While an engineering challenge, Lim said a bigger hurdle may have been overcoming initial opposition and finding funding.

“The object is to mitigate a flood,” Lim said. “If this is successful, it will be a good model for others to look at.”