 |
||||||||
 |
||||||||
|
||||||||
Back
|
$10.3-million cost set in desal plant buyout
By JEAN HELLER, Times Staff Writer CLEARWATER -- Under an agreement reached early Monday morning, it will cost Tampa Bay Water $10.3-million to buy out its desalination contractor and take over the project. All that's left is for the utility's board to decide whether to approve the deal. That decision, expected Monday, was postponed until Friday. Most board members said they wanted more time for themselves and others with a stake in the $110-million project to study the proposal. At the top of that list is the Southwest Florida Water Management District, the state water regulator which has put up $85-million to help defray the capital costs of the desalination plant in southwest Hillsborough County. When the plant begins operation next year, it will pump 25-million gallons of water a day into the regional supply system. It was clear Monday that Tampa Bay Water board members want Swiftmud's blessing for the buyout. Swiftmud's executive director, Sonny Vergara, said he wasn't prepared yet to give it. "It might be an appropriate decision and is certainly yours to make," Vergara said. "In the interest of understanding the complex arrangement and how the arrangement is proposed to be changed, (we need) a little bit more time to understand the ramifications." The water board initially asked for two additional weeks for all parties to study the buyout plan. But Jerry Maxwell, general manager of the utility, said they couldn't wait that long to begin efforts to obtain new financing without risking that contractors will not be paid on time. John Wilcox, outside counsel to Tampa Bay Water, said construction would have to stop if new financing is not available by the end of the month. That doesn't mean it would be abandoned, Maxwell said, but there would be high costs associated with restarting it. Some members were concerned about the impact of terminating the contract on the principal contractor, Poseidon Resources. "Poseidon has been performing, and we're crucifying them," said Pasco County Commissioner Ted Schrader. Pinellas County Commissioner Susan Latvala added, "I'm comfortable with the fact that we're within our rights to do what we're doing. It's the process that we used and the enemies that we're making. That's not good government." The $10.3-million buyout dealincludes $1-million for Poseidon's management services until the plant opens, performance testing and contract negotiations with a company to operate and manage the plant. The agreement also leaves the door open for Tampa Bay Water to pay for additional consulting services for the first year of operation. "Tampa Bay Desal-Poseidon are committed to working with Tampa Bay Water to see the project finished," said Andrew Kingman, Poseidon's chief financial officer. "Our customer wants to change the relationship. They have that right. We'll work to make it a smooth transition." The performance of Poseidon and other contractors on the job has never been questioned. The plant, now 58 percent completed, is on time and on budget. But Covanta Tampa Bay, the construction contractor, needs additional financing. Because of the very low bond rating of its parent company, Covanta Energy, the chances of getting additional financing at a reasonable interest rate was in doubt. "The marketplace indicated that with Covanta's problems, financing was not likely to go through," Wilcox said.
 © 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
|
Headlines From the Times local news desks |
