New estimates show cost increases to Corpus Christi's desalination plant construction
A new estimate for desalination plant development shows the price tag more than doubling compared to estimates five years ago – a cost difference some city of Corpus Christi officials hope can be managed through a low-interest state loan.
It’s anticipated staff will request the City Council’s approval Tuesday to apply for a $535 million low-interest loan through the Texas Water Development Board to cover additional costs for construction of a proposed desalination plant at its Inner Harbor site, records show.
Should the application be submitted to the state board and approved, it would be the second low-interest loan sought by the city for the seawater desalination plant’s development.
A $222 million low-interest loan was awarded to the city under the same program to pursue the project in 2020.
About $11.4 million was used for planning work, such as permitting and studies, according to records. City officials are preparing to issue bonds for the remaining $211 million, which is earmarked for design-build construction, documents show.
The $222 million estimate now falls short due to a combination of a larger project scope, higher plant capacity and inflation, city officials have said.
The new loan application request is among a slew of items expected to come before the council Tuesday to continue pursuit of desalination plant construction at the city’s Inner Harbor site, located off the ship channel and adjacent to the Hillcrest neighborhood.
The projects and funding discussions slated for the meeting represent progress in securing “a more drought-proof water source,” said City Manager Peter Zanoni in a news conference Thursday, following an announcement that Corpus Christi had officially entered Stage 2 drought conditions for the first time since about 2015.
Also on the agenda is a request to apply for as much as $180 million in additional funding through a U.S. Bureau of Reclamation grant program, as well as a request to contribute about $3.1 million through the existing state low-interest loan for construction of an AEP substation that would support the plant’s connection to the electric grid.
The proposed Inner Harbor desalination plant had initially been planned to be constructed for a capacity of 20 MGD, with the ability to be scaled up to 30 MGD over time. Its construction was estimated to cost about $220 million.
Proposed for development at an increased capacity of 30 MGD – and built with 2024 pricing for labor and materials – the plant’s construction is currently estimated to ring in at about $541.5 million, records show.
An additional $216 million in costs, to include among its items infrastructure for water distribution system integration and power transmission, were also identified that had not been incorporated into the scope of the 2019 estimate, according to city officials.
Officials are recommending the plant be constructed at 30 MGD at the outset “given the demands on our current water system and given the prospects of additional customers in the region,” Zanoni told the Caller-Times.
The city is also requesting the Port of Corpus Christi help in funding some of the Inner Harbor desalination plant infrastructure, Zanoni said Thursday.
The Texas Commission on Environmental Quality issued a water rights permit to the city in October 2022, and recently issued a draft discharge permit for the site – a move praised by some city officials and criticized by opponents.
It’s anticipated a public hearing on the draft discharge permit will be held around March, Zanoni said.
Proponents have said securing a new water supply source is integral to supporting the city’s commercial and residential growth, especially in a drought-proof region.
Opposition to the project has included concerns about impacts to the environment, as well as the nearby historically Black Hillcrest neighborhood.
Critics have also contended the city should invest funding into repairing its existing, aging infrastructure instead of a desalination plant. Project supporters have asserted that environmental impacts have been studied by experts and concerns may be mitigated, and that the Inner Harbor site was chosen, in part, because of “its immediate proximity to the residents and larger community of Corpus Christi,” with plans to include “aesthetically-pleasing buildings that will enhance the neighborhood.”
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This article originally appeared on Corpus Christi Caller Times: Corpus Christi desalination plant construction estimate rises
