The Santa Clara Valley Water District board awarded a $1.88 billion construction contract on July 24, 2026 to the Flatiron-Dragados-Sukut ADSRP Joint Venture to rebuild Anderson Dam, the largest dam in Santa Clara County, California (Water Power Magazine; The Mercury News).

It is one of the largest single dam construction awards in the United States, and it is a case study in what deferred seismic risk costs when it finally comes due.

What Happened

Anderson Dam was built in 1950, stands 240 feet tall, and holds 89,278 acre-feet — the largest of Valley Water's 10 reservoirs, serving a district of about 2 million residents (The Mercury News). The Federal Energy Regulatory Commission ordered the reservoir drained and the dam repaired in February 2020 after seismic studies concluded the structure could fail in a major earthquake (The Mercury News).

The failure scenarios modeled are the reason for the urgency: a magnitude 6.6 earthquake directly at the reservoir or a magnitude 7.2 event one mile away could send a 35-foot flood wall reaching Morgan Hill within 14 minutes and 8 feet of water into San Jose within three hours (The Mercury News).

Valley Water Board Chair Tony Estremera said rebuilding Anderson Dam is the district's top priority (The Mercury News).

Cost History — and a Discrepancy Worth Explaining

The estimate has moved substantially over 15 years: roughly $193 million in 2011, $400 million in 2016 after additional fault traces were identified, and $2.3 billion by 2023 (The Mercury News).

Current reporting cites two different totals. The Mercury News describes a $3.2 billion project, while Water Power Magazine reports a project estimate of approximately $2.8 billion (The Mercury News; Water Power Magazine). The gap appears to be a scope-boundary question: the lower figure covers the dam retrofit itself, while the higher figure includes supporting work such as the separate Anderson Dam Tunnel Project. Either way, the construction contract just awarded is $1.88 billion, and Valley Water has secured more than $114 million in state and federal grants since 2023 (The Mercury News).

The Construction Sequence

The build is planned over roughly seven years, with work scheduled to begin January 1, 2027 (The Mercury News):

• Next year: six miles of haul roads plus two temporary bridges
• 2028 through 2030: removal of the existing dam, about one-third per year
• 2031 through 2032: construction of the new dam
• 2033: project completion

Separately, the Anderson Dam Tunnel Project replaces a 4-foot outlet pipe with a 13-foot, 1,700-foot tunnel and is expected to be operational this winter (The Mercury News). Permits were required from 13 federal and state agencies (The Mercury News). Valley Water maintains a public project page with ongoing updates (Valley Water).

Why It Matters to Construction Professionals

The average age of a dam in the United States is about 60 years (The Mercury News). Anderson was built in 1950 and is being rebuilt at 77. Thousands of comparable structures across the country were designed to standards that predate modern seismic and hydrologic analysis, and many sit upstream of development that did not exist when they were built.

That makes this project a leading indicator for a category of work that is expanding: dam removal and reconstruction driven by regulatory orders rather than by growth. The scopes involved — haul roads, temporary bridges, staged embankment removal, foundation treatment, earthfill placement, outlet works and tunneling — favor large heavy-civil joint ventures, which is exactly the delivery structure Valley Water selected.

The cost trajectory is the other lesson. Escalating from $193 million to well over $2 billion reflects both scope discovery (additional fault traces found in 2016) and the compounding effect of a long regulatory and design timeline (The Mercury News). Owners with aging water infrastructure should assume early-stage estimates on seismic retrofits are directional at best.

Implications for Owners, Contractors and Subcontractors

For public owners, the permitting figure — 13 federal and state agencies — is the number to internalize (The Mercury News). FERC ordered the repair in February 2020; construction begins in January 2027. Nearly seven years elapsed between the order and the first shovel, almost all of it consumed by design, environmental review and permitting.

For general contractors, the joint venture structure signals that projects at this scale require pooled bonding capacity, specialized dam experience and equipment fleets that few single firms can field. Regional heavy-civil firms should be positioning as JV partners or major subcontractors rather than prime bidders.

For subcontractors and suppliers, the near-term opportunity is the enabling work: six miles of haul roads and two temporary bridges in the first year (The Mercury News). Aggregate supply, trucking, erosion and sediment control, dewatering, survey and geotechnical instrumentation all mobilize before the main structure work begins.

For contractors in other regions — including New York, where the Thruway Authority is currently performing seismic retrofits on Niagara River bridges — Anderson Dam demonstrates that seismic risk assessment is reshaping capital programs well outside traditional earthquake country.

What to Watch Next

Three milestones matter. First, whether the January 2027 construction start holds; large projects with 13-agency permitting frequently slip. Second, whether the tunnel project becomes operational this winter as planned, since it governs reservoir operations during the seven-year rebuild (The Mercury News). Third, whether additional state and federal grants materialize beyond the $114 million secured since 2023 — with ratepayers carrying the balance, funding decisions will shape the district's other capital work.

Valley Water's project page is the authoritative source for schedule updates (Valley Water).

Bottom Line

A $1.88 billion contract to Flatiron-Dragados-Sukut launches a seven-year rebuild of a 1950-era, 240-foot dam that has sat drained since 2020 under federal order, with construction starting in early 2027 and completion targeted for 2033 (Water Power Magazine; The Mercury News). With the average U.S. dam now around 60 years old, this project previews a growing category of regulation-driven heavy-civil work.

Sources

• The Mercury News — "Anderson Dam: Water district awards construction contract in $3.2 billion project," July 28, 2026: https://www.mercurynews.com/2026/07/28/anderson-dam-water-district-awards-construction-contract-in-3-2-billion-project-to-rebuild-largest-dam-in-santa-clara-county/
• Water Power Magazine — "Valley Water awards US$1.88bn Anderson Dam contract": https://www.waterpowermagazine.com/news/valley-water-awards-us1-88bn-anderson-dam-contract/
• Santa Clara Valley Water District — Anderson Dam project page: https://beheard.valleywater.org/anderson-dam