Covanta fails to bring agreements to
Tampa Bay Board
A special meeting of the Tampa Bay Water Board scheduled for Friday was
canceled because of Covanta Energy Corp.'s failure to bring partnering and forbearance
agreements to the table, a release from the board stated.
Without the agreements, the legal requirement necessary to have a special meeting was not
met, the release stated.
At the direction of Tampa Bay Water's board, staff negotiated into the early morning hours
with Covanta in an effort to avert the developer's default of its Sept. 30, 2003, deadline
for completing the desalination plant, the release stated.
On Sept. 24, Tampa Bay Water staff and the board were assured by Covanta that it would
complete negotiations with both USFilter and Tampa Bay Water by the end of Sept. 24, so
that documents could be delivered to the water supplier's board by Sept. 25.
At 2 a.m. Thursday, negotiations ended without Covanta providing either the agreement with
USFilter or a forbearance agreement with Tampa Bay Water, the release stated.
A full report on the Tampa Bay Seawater Desalination project status will be provided to
the Tampa Bay Water board at its scheduled monthly board meeting.
The board reported that:
By contract, Tampa Bay Water is scheduled to issue a notice of default to Covanta on Oct.
1, 2003, which triggers liquidated damages of $3,500 per day from May 21 through Sept. 30,
2003. Liquidated damages of $32,500 will be assessed starting Oct. 1, 2003, and will
continue for each day the plant remains unfinished.
Covanta will be required to provide an additional 56 million gallons of free water for a
total free water requirement of 306 million gallons to date.
In addition, Tampa Bay Water is holding more than $7 million in
construction retainage, which will not be released until the plant reaches substantial
Under the contract, Covanta will have a 48-day cure period to achieve
acceptance and substantial completion. If the company is unsuccessful,
Tampa Bay Water can terminate the contract on Nov. 18, and enter into a contract with
another company to remedy deficiencies in the desalination facility and achieve
Tampa Bay Water is Florida's largest wholesale water provider. The agency provides
wholesale drinking water to its member governments of Hillsborough, Pasco and Pinellas
counties and the
cities of New Port Richey, St. Petersburg and Tampa.