...ago, we decided to bring in a lot of younger guys and train them to be project managers. They were involved as project engineers and assistant supers or managing smaller projects. Now they’re ready to manage larger projects.”

Miller says the firm is “reworking” aging treatment plants, performing expansions and renovations. “Right now, we don’t do work beyond six hours of our office, but we’re considering making the transition,” he says. Nickerson is “watching” the Chesapeake Bay’s unfolding  cleanup initiative, says Miller.

McKim & Creed enjoyed explosive revenue growth last year thanks to a combination of small acquisitions and organic growth, largely in water-wastewater markets, says CEO Michael Creed. The North Carolina firm’s former niche in  southern chemical and pulp and paper plants moved away. It responded by buying several small environmental firms to reinforce its business. “We realized that our footprint was in the Southeast, one of the most robust growth areas in the country,” says Creed. “So we retooled to focus on population growth in coastal and metropolitan areas.”

The acquisitions included a systems integration company. “We needed good programmers who know how to make this equipment work,” Creed says. “We are slightly heavier in advanced wastewater treatment, with considerable activity in Florida,” a highly regulated state now facing chronic drought conditions.

“The state is not allowing the taking of groundwater out,” says MWH’s Uhler. But high fuel costs may affect construction of energy-intensive desalination plants, he says. “The economics keep changing,” he adds. MWH is building a new system for rain collection and water storage in Cape Coral, a planned new community of 150,000 near Fort Myer.

McKim & Creed claims great success with membrane technology. “We realize that clean water is going to be the limiting factor on continuing growth and development in most communities in America,” says Creed. “In [North Carolina’s] Research Triangle, we are going onto a permanent water restriction.”

East Bay MUA Water supply work, such as at California’s Hetch Hetchy reservoir, grew 18% for the Top 200.

Quest for Growth

Dan L. Batrack, CEO and chief operating officer of Tetra Tech Inc., with 60% of its $1.3 billion in 2006 environmental revenue in water supply, sees the market as a key driver in the firm’s quest to become a $3-billion firm in five years.

“We see water supply growing at a faster pace than wastewater, driven by demographic changes in the U.S.,”  says Batrack. He notes California’s $5-billion, 1,600-levee program and other efforts in the Great Lakes and Chesapeake Bay.

“Most of those systems have aged or weren’t constructed as engineered,” Batrack says. “We see more design-build, which we like because it allows us to do a more efficient design and deliver much faster. If the job is done right, there’s a higher margin for us. Our largest federal client is the Dept. of Defense and the Army Corps of Engineers, which is leading the coastal restoration.”

Tetra Tech’s next focus is to expand overseas. “We are the only $1-billion-plus company that has little or no presence overseas,” says Batrack. “It’s an area where we can expand without any duplication. I would like to get [our international unit] to 20% in the next five years.”

Batrack says the company is looking to grow internationally through acquisitions in countries with “funding capability,” including Eastern and Western Europe and portions of Latin America, Canada, Mexico, Australia, New Zealand, the Middle East and Asia. “Our target is to grow 15% a year, with half coming from international work.” With only $10 million in debt at the start of Tetra Tech’s fiscal 2007, “which is pretty small for a $1 billion-plus company,” the firm intends to fund its purchases with cash from operations, he says.

Earth Tech’s Sands says multinational clients want environmental consistency at their facilities worldwide. “This is prompting companies to look at environmental standards that are all encompassing...from country to country,” he says.  “That is also more cost effective.”

Sands contends that European Union countries are trying to achieve harmonization that will push companies based there to move more toward a global standard. “The EU’s Registration, Evaluation, Authorization of Chemicals (REACH) standard will affect about 30,000 substances, with some having to be eliminated and changed out,” he says. “Each country has to implement a compliance plan. So, we are working with companies on how to develop compliance strategies and auditing programs.”

In Europe and elsewhere, Top 200 firms are being called on to support clients’ own dwindling staffs. “Companies are feeling pressure with an aging workforce,” Sands says. “We are continuing to see more management consultancy for multinational companies as well as remediation and management services.”

New Players

Fox sees the emergence of new players in the international drinking-water supply market, such as GE Water & Process Technologies, a subsidiary of the venerable conglomerate, General Electric Co. “GE Water has the finance capabilities and the technology” to thrive on design-build-operate-finance projects, he says.

“GE has some state-of-the-art technology in control systems and membranes, including the recently added Xenon membrane,” says Fox. The strength of GE finance will help, he adds, especially on international projects.

In May, the firm was awarded a $550-million water and wastewater operations engineering and technology support contract on Dubai’s Palm Jumeirah island. It will supply an EPC contractor, to be selected, with the engineering, technology and O&M for a 100,000-cu-m-per-day reverse-osmosis desalination plant, a 108,00-cu-m-per-day central wastewater treatment plant and an 81,000-cu-m-per-day water-polishing plant. “GE is going to be a player in the market,” says Fox.

Desalination will continue to push work in the Middle East and in Australia as well, as the nation copes with a severe drought that has dropped reservoir capacity to 20%, says Uhler.

“The Austrailians have already taken conservation out,” Uhler says. “They’re now hooking up tanks to roof drains and requiring all houses to have them. It’s the main platform for both political parties. there.” M&E’s Guttenplan says the firm is working on proposals to build “some of the world’s largest” desalination plants in Australia, reaching 200 mgd.

WorleyParsons Komex is a new linkage of Austrailia’s Worley, America’s Parsons energy and chemicals unit and Canada’s Komex, which was acquired in  January 2006. “The environmental business in Australia was not well developed until recently,” says firm President Gordon Johnson.

“Water as a resource is probably the number-one concern in Australia right now,” says Johnson. “In certain parts of the country, the water levels are lower than they have seen in decades.” The firm has performed engineering work on water projects that range from big desalination plants in Perth to small water-supply projects in the outback where supplies have dried up.

“We went about growing the enviro business inside of WorleyParsons,” says Johnson. “We will eventually change to a WorleyParsons division.”

Johnson also sees a big future for climate-change-related work. “I would not be surprised to see the air emissions change the business the way that contamination changed it,” he says. The biggest change will likely come in the form of efficiency. “I see that the primary control is going to be on efficient use of resources.”

Johnson sees water becoming a key factor in resource projects worldwide. “People do not want their water stolen or contaminated.” On a natural-gas drilling project in Kazakhstan for which WorleyParsons Komex is doing the engineering, “water recycling is a big part,”  says Johnson. He also sees more concern about environmental impacts in some African countries, such as Nigeria.

Uhler says the U.S. housing slump could soon catch up with environmental infrastructure, at least on domestic shores. “South Florida has stopped growing,” he says. “Tampa has already backed off some infrastructure. Times are good now, but they may be softer ahead.”

But others are more optimistic for a global embrace of the market. “Water resources, recycling and reuse will be a strong market for a long time to come,” says Johnson. “Populations are rising in arid areas.”