$57M Settlement Keeps Red River Diversion Project Dispute Out of Court

The contractor and the flood management authority for the huge Purple River diversion challenge in North Dakota have resolved $400 million in claims with a $57-million settlement, a lot of it associated to the failure to make use of epoxy coating on rebar in components of the challenge to guard towards corrosion.

The settlement clears away unresolved issues simply as new leaders take over at each challenge companions and so they attempt to put the challenge’s tumultuous previous and conflicts behind them.

Underneath the settlement, the Metro Flood Diversion Authority pays $57 million in increments to the challenge developer and contractor, the Purple River Valley Alliance, whose design building arm is ASN Constructors. The alliance had made a declare over the rebar coating and different issues.

The 13-member MFDA board unanimously accepted the settlement, which reduces the chance of unknown authorized prices and the delays that may consequence from litigation, MFDA stated in an announcement. The additional funds will come out of a contingency price range.

John Shockley, the authority’s basic counsel, stated that the $400 million in claims encompassed delays, change orders and other issues along with the epoxy coating. The settlement represents lower than 2% of the $3.2-billion challenge, he advised the authority board at a July 2 assembly.

“Fifty-seven million {dollars} is clearly some huge cash, however typically with a big challenge like this I believe typically it is acceptable to step again and take a 30,000 ft view,” Shockley advised the board.

The usage of epoxy-coated rebar had been a matter of some concern to the general public, Shockley added. The dispute centered on whether or not coated rebar could be utilized in all concrete buildings or solely these in a corrosive setting.

The Fargo-Moorhead Space Diversion challenge broke floor in 2017. Its 30-mile-long channel is the primary public-private partnership accomplished at the side of the U.S. Military Corps of Engineers and the first water management P3 in North America. It is usually the primary inexperienced finance initiative within the U.S. particularly designed for climate-change adaptation.

A partnership of ACCIONA, Shikun & Binui USA and North American Building Group, the Purple River Valley Alliance is the developer for the stormwater diversion channel and related Infrastructure portion of the general Fargo-Moorhead challenge.

There’s a second main a part of the general challenge. The Corps is delivering the portion that may stage the water and management its move. The Corps additionally serves because the federal company overseeing all the challenge. 

The P3 mechanism permits the Fargo-Moorhead a part of the general challenge to be constructed 10 years earlier than if the Corps was constructing it alone, saving thousands and thousands of {dollars}. 

In March 2025, Luke Chenery took the helm of the Purple River Valley Alliance as its CEO, and in February 2025 Jason Benson grew to become everlasting MFDA Govt Director.

Fargo Metropolis Administrator Michael Redlinger and Cass County Administrator Robert Wilson had been serving as co-executive administrators because the resignation a 12 months in the past of Joel Paulsen.

In a LinkedIn publish six months after his departure, Paulsen wrote that he nonetheless helps the challenge “and I sincerely hope it is profitable however I’ve moved previous it and have centered on the one challenge that led to my resignation, building disputes.”

The authority and the alliance had been awaiting steerage on contract disagreements by the authority’s technical advisory dispute board. The board had heard the preliminary declare over the necessity to use epoxy-coated rebar in Fargo-Moorhead space diversion buildings in Could 2024 however was delayed by a criticism over open assembly necessities that the state lawyer basic needed to determine.

Floor Coating Substituted

ASN Constructors started incorporating epoxy-coated rebar in concrete buildings in July of final 12 months, MFDA reported in an announcement, however concrete buildings accomplished with out coated rebar may have their surfaces coated with what the MFDA calls a “protecting product” known as Tex-Cote®. Underneath the settlement, a coating can be made at substantial completion and re-coatings made as dictated by the producer’s specs.

The change in in management and wait “introduced a chance for a collective evaluate of previous and current disputes,” stated Benson. “We’ve got reaffirmed our dedication to working collectively and established further check-ins and collaborative approaches which are anticipated to cut back the necessity for formal battle decision processes.” Chenery expressed the identical sentiments.

“By way of our small management workforce discussions, the events have been capable of attain this technical resolution, with out the necessity to take away and exchange beforehand accomplished buildings, which helps to maintain the challenge on time and prevents financial waste,” Benson stated.

With further reporting by Jennifer Seward