Pricing depends a lot on capacity, technology, source water, and more
When it’s time for a commercial or municipal entity to make decisions about building a water treatment plant, the primary consideration is often how much the plant will cost. The capital expenditure (CAPEX) varies widely, depending on many factors, but traditional purchase agreements and the time-honored design-bid-build delivery mode have lost ground to new alternatives that can reduce or even eliminate CAPEX. The initial cost of a water treatment plant could range anywhere from millions of dollars to nothing at all. What goes into the true cost of a water treatment plant?
Factors that influence CAPEX include plant capacity, treatment technologies, raw water parameters, effluent quality targets, construction costs, site conditions, consultant fees, and regulatory compliance standards. Other add-on costs figure into the calculation, including money spent on the permitting process, pilot studies, the cost of the land itself, site work, labor costs, and various unforeseen contingencies.
Because of these variables, determining the exact cost of a water treatment plant is complex. Generally, small-scale municipal plants can range from $1 million to $5 million for a capacity of several hundred thousand to a few million gallons per day, while larger facilities can cost significantly more.
The United States Environmental Protection Agency provides several spreadsheet tools for costing out water treatment plants with different technologies. What are some current examples of water treatment plant project costs?
Selection of Recent Water Treatment Plant Costs
While prices can vary considerably, here are some recent, real-life examples:
- The town of Gretna, Virginia, with a population of about 1,250, will be replacing its aged, 432,000 GPD facility with a new package plant for approximately $10 million.
- A proposed water treatment plant in Maryville, Missouri, would purify raw surface water from a lake using ozone biologically active filters. It’s slated for commissioning in 2027 for $50 million, serving a population of just over 10,000 people.
- The new 3Kings water plant in Park City, Utah, weighed in at $100 million. While the town has only 8,000 permanent residents, 600,000 tourists visit each year, and special treatment is needed because much of the source water is taken from abandoned mining tunnels.
- In Wichita, Kansas, the price of a 2019 design-and-build agreement for the Northwest Water Treatment Facility was guaranteed to go no higher than $494 million, but has, nonetheless, gone millions over budget since the agreement was signed, nearing almost half a billion dollars. The city proper is home to about 400,000.
The high cost and complexity of water treatment infrastructure delivery —from planning to commissioning and beyond — has led many to avoid buying plants altogether. Instead, agreements that turn the entire process over to a specialized water company have become more common. Under newer agreements, the water company finances the projects and handles long-term operations and maintenance (O&M). Such agreement structures include build-own-operate (BOO) and other similar contracts, as well as plant leasing arrangements.
Water Treatment Plant Delivery Modes
With the traditional design-bid-build (DBB) delivery mode, governments raise tax dollars, issue bonds, and/or secure State Revolving Fund (SRF) loans, with the contract awarded to the lowest qualified bidder. Private companies in need of treatment plants raise investment capital and go it alone on their journey through water infrastructure development. In both cases, however, those in need of water treatment are left only with the plant itself and a handful of third-party equipment warranties in the end.
For entities seeking to avoid upfront capital expenditure, AUC’s Lease Plant Program offers a flexible and cost-effective solution. This program allows you to “pay as you go” for a water treatment plant, with ownership transferring to you at the end of the lease term if desired. Lease terms are customizable and can be structured to fit your specific project needs and budget.
By eliminating significant upfront costs, customers can allocate capital to other areas of their business. Predictable monthly payments simplify budgeting, and you’ll always have access to the latest water treatment technologies.
Conversely, BOO agreements keep experts in charge of the technical demands of advanced treatment processes, O&M, repairs, and compliance with regulatory standards. Water companies like AUC often possess unique advantages, including established supplier networks, strong financial partnerships, and deep expertise in navigating complex permitting processes. This streamlined approach can significantly reduce project risks and costs.
Staffing has also presented problems for municipalities and companies, especially with today’s lack of an adequate, trained water workforce, so having staffing be the responsibility of the water company is a welcome advantage.
BOO agreements and leases offer attractive financing options for water treatment plants. Here’s a quick breakdown when considering which arrangement might be right for your needs:
- BOO Agreements: The water company owns and operates the plant for the duration of the agreement, typically 20-30 years. This option is ideal for long-term partnerships and eliminates ownership concerns for the customer.
- Leasing: The customer leases and staffs the plant for a set term, with the option to purchase it at the end. This option offers more flexibility and allows the customer to eventually own the plant.
Simplifying Water Treatment Infrastructure Delivery From Start to Finish
AUC simplifies the complex world of water treatment infrastructure. From installation to ongoing operation, we handle every aspect, including permitting, installation, and maintenance. Our Build-Own-Operate (BOO) and lease options offer flexible financing, eliminating upfront costs without sacrificing long-term value. With AUC, you get predictable pricing, expert management, and a commitment to excellence. Contact AUC to discover how we can transform your water treatment project.