American Water Works Unit's $8.5M Project To Close Soon
Zacks Investment Research | Jun 20, 2017 08:28AM ET
American Water Works Company, Inc. (NYSE:AWK) announced that its subsidiary Illinois American Water's $8.5 million Metro East water distribution system project is nearing its finish. The phase one of the project was completed earlier in 2016.
Details of the Project
The first phase of the project included installation of approximately 3,500 feet of 36-inch and 4,500 feet of 24-inch ductile iron water main. The total project includes 2.6 miles of water main installation on the Front Street in East St. Louis.
In the phase two of the project, about 2,500 feet of 16-inch ductile iron water main will be installed. Additionally, the company has also line about 3,700 feet of 24-inch existing water main with 20-inch fusible PVC water main. The lining of the existing water main instead of its replacement is to reduce costs for customers and prevent unnecessary disruption to surrounding infrastructure.
On completion of the phase two’s installation, Illinois American Water will conduct water flow and water quality tests to ensure proper standards. Barring unforeseen circumstances, the project is scheduled to be over by the end of July.
Necessity of Investment
The water infrastructure in the U.S. has aged over time and is quite old and almost outdated. Therefore, the water utility operators are investing on a regular basis to upgrade and improve the quality of their existing infrastructure. American Water Works has set a total capital investment budget of $1.5 billion, with $1.3 billion directed toward its water and wastewater system improvements and upgrades. The company also wants to invest $6.7–$7.3 billion from 2017 through 2021. This will help it to improve earnings by 7%–10% per year in the aforesaid period from 2015.
In this line, American Water Works Company announced in Apr 2017, that its subsidiary, Pennsylvania American Water, will invest $8.5 million in 2017 to refurbish 10 of its existing water storage tanks and erect four new storage structures. (Read more: Zacks Investment Research
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