Dec 28, 2000

Tampa Bay Water Board Approves Contract For Regional Surface Water Treatment

Tampa Bay Water's board of directors approved the $135 million agreement,
one of the largest water treatment DBO contracts in the United States and an
essential component of Tampa Bay Water's plan to meet the region's need for
new water supplies. The contract includes approximately $79 million in
capital costs and $56 million in operation and maintenance fees over the
initial 15-year term and a five year option period. The new water treatment
plant will treat water at a rate of 53.9 cents per gallon, significantly
lower than earlier estimates. The agency will own and finance the facility.

"We're pleased with the way negotiations progressed and are ready to begin
the project delivery," said Charles Carden, Tampa Bay Water project manager
and lead negotiator. "Besides having the most complete proposal and the best
technical solution, the USFilter team's proposal represented a good value.
Our member governments and their customers are assured an even better value
than originally anticipated, as the contract provides higher guaranteed
water quality and several project enhancements at a lower price than
specified in the original proposal."

The team includes some of the biggest national and international names in
water treatment plant design, technology, construction and service, as well
as a strong local presence. USFilter's design, construction and operations
expertise are teamed with Camp Dresser & McKee's design power and Clark
Construction's specialty in design-build projects.

"We commend Tampa Bay Water on its procurement process that steered away
from politics and asked potential partners to get straight to the technical
fundamentals of the project," said Mike Stark, executive vice president and
general manager of USFilter Operating Services. "This enabled all companies
to put their full energy toward providing creative solutions and alternative
designs that offer additional cost savings and long-term value."

The facility will treat water from the Hillsborough and Alafia rivers and
Tampa Bypass Canal to standards that exceed the current EPA Safe Drinking
Water Act requirements for potable water. A large-scale pilot testing
program USFilter executed at the Lake Manatee Water Treatment Plant
demonstrated that the Actiflo technology offered better finished water
quality, improved process reliability, reduced treatment costs and reduced
space requirements over the conventional flocculation-sedimentation design
specified in the base bid requirements.

The DBO contract is a relatively new form of public/private partnership in
the water industry. The approach takes advantage of recently permitted
long-term relationships between public utility owners and private service
vendors. A DBO project challenges the traditional procurement approach by
focusing on risk management and project performance, resulting in the owner
contracting with a single, unified design, construction and operations team.
Water agencies like the approach because of the potential for saving 10 to
20 percent of construction costs and 20 to 40 percent of operating costs.

Carden says that Tampa Bay Water estimates their total project savings to be
21 percent or approximately $85 million over the 20-year life cycle of the
project. The water treatment plant is the key to Tampa Bay Water's Master
Water Plan, which will develop 53 million gallons per day (mgd) by 2003 and
an additional 58 mgd by 2008. The facility is scheduled to begin treating
water by December 2002 and will provide water to the utilities of
Hillsborough, Pasco and Pinellas counties including the cities of St.
Petersburg and Tampa.