Oceanside company sued over troubled desalination plant

By: SCOTT MARSHALL - Staff Writer | Wednesday, June 23, 2004 10:22 PM PDT ∞

OCEANSIDE ---- A Florida water agency is suing an Oceanside company involved in the construction of a desalination plant in Tampa Bay that has allegedly failed to meet expectations.

Tampa Bay Water alleges that Hydranautics Inc., breached a warranty for work done at the Tampa Bay Seawater Desalination Facility and failed to fulfill the terms of its contract, which called for the company to "design, install, start-up and test" systems at the plant.

The water agency also is suing two insurance companies that posted a nearly $24 million performance bond to guarantee that the desalination plant would run properly.

The lawsuit is the second one filed this year in which Tampa Bay Water and Hydranautics dispute what responsiblity the Oceanside company bears for the plant.

Hydranautics sued Tampa Bay Water in March in federal court in Florida, asking the court to declare that Hydranautics is not responsible for "purported deficiencies" at the plant and is not obliged to pay to fix them. That lawsuit still is pending.

John W. Foster Sr., an Orlando, Fla., attorney who represents Hydranautics in the federal lawsuit, and company officials in Oceanside could not be reached for comment Wednesday.

Donald Conn, general counsel for Tampa Bay Water, said the legal disputes likely will be consolidated into one case to have one judge decide them. Meanwhile, Tampa Bay Water is moving ahead with plans to receive bids by the end of July to repair the problems at the desalination plant, which needs more electricity and chemicals than expected to produce usable water, Conn said.

"The problem with the plant was that it does not operate as efficiently as it should," Conn said.

The plant was intended to provide Tampa Bay Water an alternative source of water to meet the demand from population growth in communities the agency serves, according to the agency's lawsuit. Tampa Bay Water provides water to 2 million customers in three central Florida counties, the agency's Web site stated.

The plant consists of systems to remove salt and other solid material from seawater and to "stabilize and chlorinate" the water before it is distributed to customers, Hydranautics said in its federal lawsuit.

Conn said the plant is operational and produces 8 million to 12 million gallons of water a day. However, deficiencies prevent the plant from running every day, and it does not meet the standards set in the contract with Hydranautics, Conn said.

Tampa Bay Water alleges in its lawsuit that through a series of contracts, Hydranautics assumed responsibility for the performance of the pre-treatment filter system and the reverse osmosis seawater desalination system. In June 2003, Tampa Bay Water issued a report stating that the plant failed an "acceptance test" because of 31 deficiencies, the lawsuit alleges.

Hydranautics has not corrected the problems and Tampa Bay Water will incur the costs to do so, the lawsuit alleges.

Hydranautics alleges in its federal lawsuit that it believed contracts made Tampa Bay Water and another company and subcontractors responsible for part of the water system. As a result, the suit said, the water agency and the other companies should correct any problems.

"Hydranautics is not responsible or liable for the purported deficiencies in the facility, and has no obligation to cure any deficiencies, or to complete the facility" or to pay the costs associated with those actions, the Hydranautics lawsuit alleges.

Staff writer Bradley J. Fikes contributed to this story.

Contact staff writer Scott Marshall at (760) 631-6623 or smarshall@nctimes.com.