A contractor has begun a two-year project to repair and upgrade the Hoolehua Water System on Molokai, which serves thousands and is in “desperate need of repair.”

The Department of Hawaiian Home Lands, which controls the water system along with three others, held a groundbreaking ceremony on Thursday to mark the beginning of the $37 million capital improvement project, $19 million of which was allocated by the U.S. Department of Agriculture.

“Among the four water systems the Department oversees, Hoolehua is the oldest and has been in desperate need of repair for some time,” said Hawaiian Homes Commission Chair Ailā in a statement. “The project highlights our state and congressional leadership’s understanding of important issues facing our rural communities as this project would not be possible without their initiative.”

Contractor Goodfellow Brothers, managed by SSFM International, will be in charge of the project, which will be built in two phases over seven construction sites. It will include the “installation of a 200,000-gallon storage tank, upgrades to automation systems, a new warehouse and a new emergency generator disel fuel tank,” DHHL said.

The project also includes the construction of new paved roads and fencing as well as the repair and replacement of tanks, pumps and other parts of the system.

The 80-year-old water system serves more than 2,400 customers, including 500 homesteads in Hoolehua-Palaau, Kalamaula and Moomomi. It also serves the post office, schools and the airport, according to the department.

DHHL said customers should expect intermittent water outages during construction.