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.