Saturday, December 12, 2009
The Tampa Bay Desal Project
Tampa Bay area decided fifteen years ago to embark in an ambicious project: to solve its growing water scarcity by building the world largest ocean desalination plants. These days, apparently, the plant is starting to produce water. There are several lessons to be learned: enormous ego issues are involved in water projects, desal is more difficult than imagined, the American water engineering industry is in worse shape than realized.
After the long formulation period, the project was given to an American-Israeli company called Poseidon. Barely a year after Poseidon won the bid, its subcontractor, the Boston-based Stone & Webster, one of the world's largest and most respected engineering firms, declared bankruptcy. In December 2000, Poseidon hired Covanta to take over. A year later, Covanta filed for bankruptcy.
Considering that the Government would be better at managing the project than a private firm, Tampa Bay Water's board bought the plant from Poseidon -- even though Poseidon insisted it was on track to complete it. Critics such as state Sen. Ronda Storms, a former board member and Hillsborough County commissioner who opposed buying the half-finished plant, say the move was about ego and control and put ratepayers at enormous risk. After the purchase, ratepayers -- not Poseidon -- were on the hook for cost overruns and other problems. And while it got rid of the solvent company, Tampa Bay Water stuck with the bankrupt company, Covanta, to finish the plant.
The board's position was that Tampa Bay Water's access to cheaper financing than the private companies would save taxpayers millions. Most important, the agency was ultimately responsible for making sure the region got the fresh water it needed. Poseidon had already jumped the most significant hurdle, environmental permitting. The board didn't expect that it would be hard to finish the plant.
In 2003, the plant produced its first 3 million gallons of fresh water, then plant's 10,000 reverse-osmosis membranes began to clog. Under the original contract, Poseidon would have been responsible for fixing the membranes. Instead, the taxpayers were on the hook. Tampa Bay Water ultimately hired American Water Pridesa (since acquired by Spain's Acciona Agua), which spent four years and $32 million on remediation.
We arrive to Dec. 2009 and the plant starts to operate. The original cost estimates have been forgotten. In my humble opinion, any new difficulty may cause the plant to be abandoned. To transfer it back to the Israelis is unthinkable. Ego is involved, as the Senator Storms already has established.