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<br />/ <br /> <br />Project Description and Alternatives <br /> <br />The purpose of this project is to provide a means for the TWC to continue providing irrigation <br />water to shareholders while minimizing the occurrence of future failures of the tunnel. Five <br />alternatives were considered: <br /> <br />1. The no-action alternative. <br />2. Rebuild only the collapsed portion of the tunnel ($1 million.) <br />3. Rebuild the collapsed portion of the tunnel, and other sections of the tunnel that are found to <br />be in need of immediate reconstruction. ($1.77 million.) <br />4. Bore a new tunnel ($22 million.) <br />5. Completely rehabilitate the eastern Y2 and parts of the western Y2 of the tunnel ($4.1 million, <br />revised up from the initial estimate of $2.33 million.) <br /> <br />Alternative No" 1 was considered unacceptable since it means the TWC could not deliver water <br />to its shareholders. <br /> <br />Alternative No.2, rebuild only the collapsed portion of the tunnel, was ruled out because it is <br />not a reliable approach. There are several other areas in the tunnel that are in imminent danger <br />of collapse. These areas must be repaired to ensure the tunnel operates satisfactorily for the <br />long term. <br /> <br />Alternative No.3 rebuild the collapsed portion of the tunnel, and other sections of the tunnel <br />that are found to be in need of immediate reconstruction, was the preferred alternative when the <br />Company applied for a CWCS Emergency loan in August 2000. However, this alternative has <br />since been ruled out because of the high cost of rernobilization to complete the project. <br /> <br />Alternative No" 4 was ruled out due to cost. <br /> <br />Alternative No" 5, rehabilitate the eastern Y2 and parts of the western Y2 of the tunnel, is now <br />the preferred alternative of the TWC. This saves mobilization costs, and shortens the time to <br />complete the overall project. The Company is using the existing $1.6 million emergency loan <br />now, as work progresses on Phase 1 of the project. Funds from this additional loan (if approved) <br />will become available around July 1, 2001. These funds will be used to complete the project by <br />early summer 2001. (Funds from the $1.6 million Emergency loan will be expended by about <br />May 1, 2001. The Company understands that it will need to arrange for short-term bank <br />financing to cover the period May 1 through July 1. The Company also understands that if this <br />additional CWCS loan is not approved, it will need to obtain alternative long-term financing to <br />complete Phase 2 of the project.) <br /> <br />Selected Alternative 5 involves construction of access roads and construction staging areas at <br />both ends of the tunnel. For downstream access, a new road must be built up a steep <br />mountainside, across USFS property. The cost of access will be a major part of the total project <br />cost. The eastern 5,500 feet of the tunnel will be cleaned and stabilized, a temporary rail <br />installed to facilitate construction and portions of the tunnel will be re-mined to establish <br />sufficient width for construction equipment. <br /> <br />Tunnel Water Company <br />Laramie-Poudre Tunnel Feasibility Study <br />September 2000 (Updated December 2000) <br /> <br />Page 9 of 15 <br />