
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, June 1, 1995                   TAG: 9506010072
SECTION: VIRGINIA                    PAGE: C-3   EDITION: NEW RIVER VALLEY 
SOURCE: Associated Press
DATELINE: NORFOLK                                LENGTH: Short

END TO TALKS ON PIPELINE THREATENED

Officials in Virginia Beach and Norfolk say they have made their best offers and are ready to walk away from negotiations on a water deal that is the key to salvaging the Lake Gaston pipeline agreement.

After more than a decade of court battles, Virginia Beach and North Carolina in March reached a settlement allowing the city to build a 76-mile pipeline to withdraw up to 60 million gallons of water a day from Lake Gaston. The lake straddles the Virginia-North Carolina border.

However, Norfolk officials have objected to a provision in the settlement that would restrict Norfolk's water sales outside the region. Gov. George Allen has said those differences must be worked out before he will call the General Assembly into special session to consider the agreement.

The deal requires approval of both states' legislatures by the end of June.

Negotiators have made some progress. They have agreed on how much water Virginia Beach would buy from Norfolk, and the price it would pay, to compensate Norfolk for being unable to sell water outside the region.

However, they have yet to agree on whether to include an inflation factor in the price and whether Virginia Beach would buy a larger quantity of water for a transition period.

Several Southside Virginia legislators have objected to the pipeline and have complained that the region was left out of court-ordered mediation that led to the agreement. Norfolk officials also were not involved in the negotiations.

Memo: NOTE: Shorter version ran in Metro edition.

by CNB