Covanta obtains notice to proceed on Tampa Bay desalination facility

Covanta Energy Corp. today announced that it has received notice to proceed to build and operate a 25 mgd reverse osmosis desalination drinking water facility for Tampa Bay Water.

FAIRFIELD, NJ, June 1, 2001 — Covanta Energy Corp. today announced that it has received notice to proceed from Poseidon Resources Corporation to build and operate a 25 mgd reverse osmosis desalination potable water drinking facility for Tampa Bay Water. Poseidon, a developer of water projects, entered into a Water Purchase Agreement with Tampa Bay Water in 1999.

Under a February 2001 agreement with Poseidon, Covanta will design and build the facility for a fixed price of approximately $74 million and will operate the plant for the next 30 years for an annual service fee of approximately $7 million per year, adjusted for inflation. Covanta expects to break ground on the project in the next few weeks, and the project is scheduled to be in service by year-end 2002.

"This project is a good example of the emerging market of domestic design/build/operate (or d/b/o) water and wastewater infrastructure projects," said Scott G. Mackin, President and Chief Executive Officer of Covanta Energy. "By leveraging the expertise we've gained over 18 years of developing and implementing more than 27 similarly structured d/b/o energy infrastructure projects for the public sector, Covanta is well positioned to pursue these opportunities in water."

Joe Burgess, Executive Vice President of Covanta Water Systems, added, "This project, the largest RO desalination drinking water project in the U.S., demonstrates the potential of Covanta's industry-leading DualSand filtration technology. The Tampa Bay facility will produce the least expensive potable water of any desalination plant - about $2 per gallon. For client communities accustomed to seeing desalination costs of $4-6 per gallon, this is very attractive."

The facility will produce between 25 and 28.75 million gallons per day and is designed to be expandable to 35 million gallons per day. It will use sand filtration technology for pre-treatment followed by extensive banks of reverse osmosis membrane cartridges of the type used in desalination facilities in the U.S. and overseas.

Covanta Energy Corporation is an internationally recognized designer, developer, owner and operator of power generation projects and provider of related infrastructure services. The company's independent power business develops, structures, owns, operates and maintains projects that generate power for sale to utilities and industrial users worldwide. Its waste-to-energy facilities convert municipal solid waste into energy for numerous communities, predominantly in the United States.

The company also offers single-source design/build/operate capabilities for water and wastewater treatment infrastructures. Additional information about Covanta can be obtained via the Internet at www.covantaenergy.com.

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