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Sector Check desalinated water should be part of the water supply and more than 58 percent would be willing to pay more for water. Yamada concurs that reliability is the biggest advantage to desalinated water. ���It doesn���t matter if it rains or not; we���re going to have this water supply to count on.��� to nine months they will seek qualified contractors with construction expected to begin in late 2014. Water Scarcity Drives Demand Lambert says the key drivers for desalination in the U.S. are drought conditions, less availability of fresh water supplies and, increasingly, the economics of the existing water system. In a recent press release, the publisher of Global Water Intelligence reported that the United Nations expects 14 percent of the world���s population to encounter water scarcity by 2025. A combination of lower cost membrane desalination and increased water scarcity has led to increasing interest in large desalination plants in the U.S. The Economic Viability of Desalinated Water As water from all sources becomes more expensive, desalination becomes more economically feasible. While desalination doesn���t have to be on a large scale, plants such as the one in Carlsbad and Huntington Beach offer economies of scale. Loveland contends that the price the San Diego County Water Authority will pay for the water is affordable, still pennies per gallon. ���While it is more costly than current standards it is on par with any additional sources of supply,��� said Loveland. According to an analysis completed by the SDCWA, the costs for desalinated water may be on par with standard treated water by as early as 2024. The biggest advantage to desalinated water, according to Loveland, is that it���s a drought-proof local source of supply. A public opinion poll conducted in late 2012 confirms that residents are on board with the plan. Eighty-two percent of the public in San Diego County felt A lot is hinging on the success of San Diego���s desalination plant ��� it will provide a model for more facilities in California and other coastal states, and hence opportunities for equipment dealers. Carlsbad Financing Project Named ���Deal of the Year��� The unique financing for the Carlsbad project provides a glimpse into how future infrastructure projects may be funded. The SDCWA has no capital investment in the plant itself. Instead, the project is a result of a creative public partnership agreement between Poseidon Resources and the Water Authority ��� the transaction features a 30-year water purchase agreement between the two parties that allows the SDCWA to transfer certain key risks to Poseidon while supporting project financing at the investment-grade level. Poseidon bears responsibility for the design, construction and operation of the plant; the Authority will not pay for any water not meeting stringent quality standards. The project���s costs are financed by $734 million in tax-exempt bonds the California Pollution Control Financing Authority issued on behalf of Poseidon and the Water Authority. Private equity investor Stonepeak Infrastructure Partners provided the remainder of the project capital. The SDCWA will own the 10-mile, 54-inch water delivery pipeline that will travel eastward from the seawater desalination plant through Carlsbad, Vista and San Marcos to the San Diego County Water Authority���s Second Aqueduct connection facility in San Marcos. In total, the SDCWA will be responsible for approximately $80 million in project costs. Project Finance magazine recently awarded ���North American Water Deal of the Year 2012��� honors to the Carlsbad Desalination Project, recognizing the innovation, deal repeatability, best practices, problem-solving, risk mitigation, value for money, and speed of delivery in the financing of infrastructure projects. Meeting Construction Challenges Once the financing was secured, Poseidon awarded contracts for engineering, procurement and construction to the joint venture of Kiewit Shea Desalination. The joint venture is comprised of Kiewit Corporation and J.F. Shea Construction. The plant���s main process design (water pretreatment, reverse osmosis filtration, post-treatment and instrumentation and control systems) will be integrated by subcontractor IDE Americas. Operation and maintenance (O&M) of the plant will also be carried out by IDE Technologies for a period of 30 years. According to Loveland, due to the size and complexity of their projects, Poseidon seeks out construction partners of sufficient size and financial resources. ���Only a half a dozen firms meet the requirements in California,��� said Loveland. The (continued on next page) April 2013 | Construction Equipment Distribution | www.cedmag.com | 31 30_Desalination_Feature_KP.indd 31 3/25/13 12:13 PM