SAIC Lead Advisor to San Diego County Water Authority on Recent WPA

MCLEAN, Va. (Dec. 12, 2012) – Science Applications International Corporation (SAIC), through its wholly owned subsidiary SAIC Energy, Environment & Infrastructure, LLC, provided independent advisory services instrumental to the approval of San Diego County Water Authority’s recent water purchase agreement (WPA). The WPA includes provisions for the Water Authority to buy up to 50 MGD (189,250 m3/d) of water to be produced from the Poseidon Resources’ Carlsbad seawater desalination project over the next 30 years.

The WPA will support the financing for the project, which will total more than $900 million and will combine private activity bonds plus private equity capital for the Poseidon-owned plant and tax-exempt governmental purpose bonds issued by the California Pollution Control Financing Authority for the conveyance pipeline. This makes the project one of the largest public/private financed deals in the U.S. water market. The recent approval of this WPA between the Water Authority and Poseidon means that the San Diego region will have a new drought-proof local water supply from the Pacific Ocean.

SAIC Water and Utility Section Manager Neil Callahan, an expert in alternative project delivery, was a lead advisor to the Water Authority on this agreement. Callahan recently told Water Desalination Report in an interview that a significant point in the deal was making a 56,000 acre feet per year (AFY) take-or-pay offering and getting it to work with a 48,000 AFY minimum demand commitment. “They were able to maintain an upside 56,000 AFY maximum supply commitment in order to fit the Water Authority’s variable demands and still remain financeable,” he said.

Callahan continued, “This deal is unique and will set the example for U.S. private finance and public infrastructure management parties for what is needed to craft a non-recourse financed water project with U.S. public water utilities.”

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