The $1-billion first phase of the Southern Delivery System, one of the largest water projects to be built in Colorado in decades, is well under way and headed toward completion in 2016.

The SDS will bring Arkansas River water stored in the Pueblo Reservoir, located west of the city of Pueblo, north to Colorado Springs by means of a 62-mile underground steel pipeline. That water will serve the cities of Colorado Springs, Fountain, Security and Pueblo West.

More than 100 Colorado companies are already at work on the project, which is owned by Colorado Springs Utilities (CSU), and more than $100 million in contracts have been awarded. Funding comes from Build America Bonds and rate hikes for area water users.

"What this project means for the communities partnering in it is having secure water for several decades," says John Fredell, SDS project director. "This water is for businesses and consumers. We want to make sure we can attract businesses here and keep the ones we have."

Construction on the massive undertaking started in mid-2011, and water is expected to start flowing in 2016. CSU says that progress on the main components of the first phase includes:

Pueblo Dam Connection: Crews have excavated to 80 ft below the dam's North Outlet Works and poured more than 2,800 cu yd of concrete for the connection's foundation and valve house. The steel liner has been fabricated and installed, the valve house has been built and valves are currently being installed. Work on this part of the connection is scheduled for completion by the middle of the year.

Pipeline: A total of 18 miles of raw water pipeline is under construction in Pueblo County, with more than five miles of pipe installed. Most of that county's pipeline is scheduled to be finished by the end of 2012.

In El Paso County, roughly seven miles of raw water pipeline have been installed east of Fountain, and construction is nearly finished on about a mile of treated water pipeline. One mile of treated water pipeline was finished in 2011 as well as two tunnels under U.S. Highway 24.

Water Treatment Plant and Pump Stations: Final design on the treatment plant, located at Marksheffel Road and U.S. 24 in Colorado Springs, is under way. Construction is scheduled to begin in 2013. The project's three raw water pump stations—to be located near Pueblo Reservoir in Pueblo County and at El Paso County's Williams Creek and Upper Williams Creek reservoirs—are currently in the design phase, with a planned construction start in 2013.

Under Budget

The initial phase of the SDS is expected to cost roughly $1 billion, which is $45 million under budget, according to CSU. As of mid-March, more than 100 workers—from pipe installers and truck drivers to welders—were working on the pipeline.

"People have asked why we would build this project at this time, with the economy what it is," Fredell says. "But why wouldn't you? We're getting great pricing, and the project is a great economic stimulus .… We'll have 800 people working on it at peak." Peak construction is projected to occur in 2014.

The SDS's second phase is expected to start in 2020 and be complete in 2025. It will add two reservoirs to extend raw-water delivery capacity, plus expand the water treatment plant and pump stations built during Phase 1 to better meet peak demand of more than 100 million gallons of treated drinking water per day.

"We're pushing Phase 2 out as far as we can, so we don't have to pay for it before we need to," Fredell says.