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$29-million more going to troubled desal plant

Tampa Bay Water officials hope the money will finally fix the Apollo Beach facility. Water rates will go up.

Published November 16, 2004

CLEARWATER - Tampa Bay Water officials on Monday committed to spend another $29-million on a troubled desalination plant that is millions over budget, years late and certain to raise water rates.

They hope the expensive fix will finally make the project a working reality.

The regional water authority's board voted unanimously to sign a contract with American Water/Pridesa to fix what ails the Apollo Beach plant, the largest desalination plant in the United States. The project's original $110-million price tag has grown to $140-million.

For its money, Tampa Bay Water gets an ironclad guarantee that the plant will be operational after the two-year fix is made, a guarantee backed by a $36-million performance bond.

Board Chairman Bob Stewart, the Pinellas County Commission chairman, recalled drinking a glass of the plant's water to toast its success. The project has had nothing but problems since. So he offered a measured reaction to Monday's vote.

"You have to be careful what you say in public, so today I am cautiously optimistic," Stewart said.

The $29-million contract will add about 9 cents to the cost of every 1,000 gallons for Tampa Bay Water's 2-million customers in Pinellas, Pasco and Hillsborough counties and the cities of Tampa, St. Petersburg and New Port Richey. A family using 8,000 gallons of water a month would pay an extra 72 cents.

The rates will not increase until the plant is up and running, projected for sometime in early 2007, four years after its original start-up date. Tampa Bay Water is counting on the plant to produce a sixth of the utility's needs - or, about 25-million gallons out of 162-million gallons a day.

The board rejected a proposal from three former contractors on the project to prove they could make the plant work for much less than $29-million.

The utility has sued the contractors, and general counsel Don Conn said their proposal was "an 11th-hour legal maneuver."

Conn said the group had been given ample opportunities in the past 18 months to demonstrate that the plant could work but failed to take advantage of them.

Before the meeting, general manager Jerry Maxwell also dismissed the proposal.

"They're asking for eight weeks on top of 18 months," Maxwell said. "Even the New York Yankees only get three strikes."

The vote is the latest attempt to salvage the plant, a keystone in a plan to relieve the region's dependence on groundwater. Decades of pumping drained wetlands and caused sinkholes to form under homes. Hardest hit were central Pasco, western Hillsborough and northern Pinellas counties.

The two-year project to get the plant up and running involves one year of design and test modeling and one year of construction.

Tampa Bay Water spokeswoman Michelle Robinson said one reason for optimism is the experience of the new contractors. American Water, a U.S. company owned by German giant RWE, has more than 100 years of experience running utilities. Its partner, Pridesa, is a Swiss company that built the largest desal plant in Europe in Carboneras, Spain, and is owned by RWE. That plant has been operating for about two years.

The repair plan has focused on 39 deficiencies identified in the pretreatment of raw water drawn from Tampa Bay. Solids flowing into the system have caused clogs that increased power, chemical, maintenance and repair costs.

The first contract on the plant was signed in December 1999. The plant was designed to take 40-million gallons of bay water, force it through tightly woven membranes to screen out salt and turn it into 25-million gallons of freshwater each day.

Instead, the plant has produced headaches, bankruptcies and lawsuits.

The repair plan has focused on 39 deficiencies. ... Solids flowing into the system have caused clogs that increased power, chemical, maintenance and repair costs.

The original contractor, Stone & Webster, went bankrupt in 2000. Its partner, Poseidon Water Resources, then hired Covanta Energy, which filed for bankruptcy a year later. Tampa Bay Water ousted Poseidon but stuck with Covanta. Last year, Covanta Tampa Construction, a spinoff company, went bankrupt before Tampa Bay Water could fire it.

The plant was supposed to be finished by January 2003. Two months later, it produced its first 3-million gallons. Local officials toasted success with plastic cups, but the celebration was premature.

In May 2003, Covanta Tampa Construction flunked a crucial operational test. Although the plant was producing near capacity, the membranes were fouling too quickly, which threatened to wear them out too soon. The first full set of membranes cost $5-million. Since water rates were based on each membrane lasting five to seven years, replacing them more often would drive up rates.

Covanta officials blamed the clogs on Asian green mussels growing on the intake pipes at the Tampa Electric Co. power plant, which provides the water. Tampa Bay Water officials suspected the problems were with Covanta's pretreatment system.

Repeated efforts by Covanta to fix the plant failed, as relations with the utility board broke down amid charges, countercharges and, eventually, lawsuits.

In February, Tampa Bay Water voted to pay Covanta $4.4-million to go away so someone else could fix the plant and run it for the next 30 years.

Initially, the fix was projected to cost about $14-million, but American Water's bid came in at $29-million and the only other bid was $50-million.

[Last modified November 16, 2004, 00:40:25]

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