On March 29, 2017, the U.S. Bureau of Land Management (BLM), an agency of the U.S. Department of the Interior, issued an Instruction Memorandum (IM) No. 2017-060 (https://www.blm.gov/policy/im-2017-060) to all field offices regarding the evaluation of existing and proposed activities within railroad rights-of-way (ROW) granted under the General Railroad Right-of-Way Act of 1875 (1875 Act).  IM No. 2017-060 rescinds the previous administration’s IM No. 2014-122 and IM No. 2012-038, which together had established a framework for evaluation of third party use of 1875 Act railroad ROWs over federal lands. This action follows a bipartisan request from 18 members of the U.S. House of Representatives to the new Interior Secretary that the agency rescind the IMs, withdraw an evaluation of the Cadiz Water Project’s proposed use of an 1875 Act ROW and issue a finding that the Project is consistent with the scope of the ROW.

In 2008, Cadiz Inc. entered a lease agreement with the Arizona & California Railroad (ARZC) to utilize 43-miles of its existing, active railroad ROW for the Cadiz Water Project’s conveyance pipeline. In 2009, the Interior Department stated that the proposed use was within the scope of the ARZC ROW.  In October 2015, following the issuance of IM 2014-122, BLM released an evaluation of the Cadiz Water Project’s proposed use of the ARZC ROW summarizing that the proposed use was outside the ROW’s scope and therefore required a separate ROW permit. The Company stated then, and continues to believe, that the BLM’s 2015 evaluation was contrary to law and policy and subsequently sought clarification from Congress as to the scope of such railroad ROWs.

The Company is supportive of efforts by members of Congress to address the BLM’s October 2015 evaluation of the Cadiz Water Project and we are pleased BLM has rescinded the IMs that gave rise to this evaluation.