Tampa Bay Water's board of directors approved a settlement agreement Feb. 9 with the engineer-construction contractor for its troubled 25-million-gal-per-day desalination plant. The agreement was brokered by a bankruptcy court mediator (ENR 1/19, p. 16). Under terms of the deal, the utility will pay Covanta Tampa Construction $4.4 million from $7.9 million held in construction retainage on the $110-million project. The contractor will drop all claims and abandon attempts to stay on board as a 30-year operations and maintenance contractor.

Problems arose last spring when the utility flunked the contractor on a performance evaluation test. Now Tampa Bay Water will open discussions with three shortlisted interim O&M contractors with experience in reverse osmosis desalination plants. American Water Works Co. Inc./Pridesa are the respective American- and Spanish-owned subsidiaries of RWE AG of Essen, Germany. USFilter is a U.S. division of Veolia Environnement S.A. in Paris. Two American-owned partners compose the third team: Ionics Inc., Watertown, Mass., and MWH, Pasadena, Calif.

The plant will be placed on "hot standby" status for the time being, says Ken Herd, Tampa Bay Water plant project manager. "We'll continue to run water through the pre-treatment loop to prevent bio-fouling," he says. But instead of flowing through the reverse osmosis filter process train, makeup water will be dumped back into Tampa Bay. Each team will visit the plant later this month and prepare to run individual pilot tests. The utility expects to select an interim O&M contractor "by late spring," Herd says. The utility expects that the interim contractor would take "a year or two" to formulate a solution that would enable the plant to run at design production, he adds. At that point, Tampa Bay Water will try to enter into a long-term operation and management agreement.

Covanta Tampa Construction officials say the company will continue to operate the plant until the interim operator comes aboard, but eventually the organization will go out of existence. "We'll continue to operate the plant until the interim operator teams can get in and look at the plant," says Scott Whitney, vice president of the parent corporation, Fairfield, N.J.-based Covanta Energy Corp.

The company's core business is power generation from waste-to-energy plants, but it has a long-term design-build-operate agreement with the Bessemer, Ala., water authority and eight small wastewater treatment plants in upstate New York. Covanta intends to remain in those ventures, says Whitney, but does not intend to embark on any other desalination projects in the immediate future, he says.

Despite its difficulties in Tampa, Covanta executives defend their record and assert that desalination has a bright future in the U.S. "It would be a shame if people pointed to Tampa as a reason for not going forward with desal projects," says John Phillips, Covanta vice president. "We delivered that plant on time and on budget and produced water at a cost of 30% to 40% below what anyone else in the world is doing."

Interest in desalination is widespread in North America, with dozens of proposals under discussion. The problems at Tampa Bay may have set back chances for success at a $270-million, 50-mgd desalination plant that Poseidon Resources wanted to build in Carlsbad, Calif. The San Diego County Water Authority governing board on Jan. 29 unanimously voted to withdraw from the Stamford, Conn.-based developer's proposal to build a desalination plant adjacent to the Encina Power Station.

Relations between Poseidon and the water authority deteriorated this year. Board members also raised financial and engineering concerns. Despite the vote, Poseidon intends to push ahead with the project and secure a contract water to the cities of Carlsbad or Oceanside, says a company spokesman.