Black & Veatch Drinking water plants tap new technology for bigger output.

The collapsing housing market in the U.S. is hitting some environmental firms, particularly those working in sectors such as water and wastewater services. But those in the nuclear-waste and hazardous-materials sectors have more breathing room as interest continues to grow in environmental cleanup and sustainability projects.

Even with weakening demand for some traditional environmental services, firms are expanding into new areas beyond the normal remediation models. “Our role has shifted from cleanup of past sins to helping with the business model,” says Lee McIntire, chief operating officer of CH2M Hill Cos. Environmental concerns are now encroaching on more traditional areas of construction, he explains. “To site a factory, the issue is not just the cost of steel but where you are going to get the energy and water. The pace of change is breathtaking,” he says.

Some water and wastewater firms are looking abroad for projects in order to make up for a slower year in the U.S. “It is not as good as it has been in the U.S., there is a softness in the market,” says Jim Hipps, senior vice president and chief development officer of the water division of Black & Veatch. “There is a slowdown in regions with real-estate problems, and we expect to see more next year.” Hipps says growth in the domestic water market is slowing to 2-4% this year from 7-9% last year, and a further drop is expected next year.

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Yet Black & Veatch is finding plenty of work abroad. “We have quite a bit of work right now. We just entered the second phase of the [Bundamba Advanced Water Treatment Plant] drought relief project outside Brisbane, Australia, and we are getting ready for the selection process for some big contracts in the U.K,” says Hipps.

Interest is rising for combination approaches in the water sector as clients exploit sources once thought unusable. Hipps notes his firm’s involvement in a large water plant in Singapore. “Instead of looking at just one solution, they want a combination of three: desalinization, recycle/reuse and capturing systems,” he says. “We are seeing more demand for high-tech solutions to deal with more brackish water that previously wasn’t considered.” Virginia Grebbien, global business development manager at Parsons adds, “The market is becoming more cost oriented and as a result is looking for value propositions that resolve multiple issues with a single program.”

The All-American Canal Lining Project in California is one significant domestic project for Parsons that is roaring ahead regardless of the broader weakness in the water market. Originally built in the 1930s, the 82-mile-long All-American Canal brings water from Colorado River to the Imperial Valley. The canal is unlined and is experiencing significant seepage loss, so a concrete-lined, 23-mile-long canal is being constructed parallel to the original to reduce water loss. Parsons is providing project- and construction-management services on the project.

With public funding sometimes precarious, the private sector is exploring investments in infrastructure projects. “We are seeing more interest in the investment community in water projects, but we have been on the verge of a boom in private infrastructure investment for forever,” notes Black & Veatch’s Hipps. “We expect to see growth in private investment, but there is no indication of heading toward a European model with widespread private utilities.”

Environmental remediation has taken on a new scale in Florida’s Everglades, where the Central Everglades Restoration Plan includes construction of the world’s largest manmade reservoir as part of a greater effort to restore the wetlands. While the details were still being worked out, U.S. Sugar Corp. announced in June that it would sell to the State of Florida 187,000 acres in the area for $1.75 billion in one of the largest environmental land acquisitions in U.S. history. Various projects covered by CERP have been under way since 2006, but the land acquisition has opened the door for a host of major environmental projects that previously were not feasible.

Nuclear remediation in the U.S. saw some significant changes in leadership this past year, with big players vying for position as management contracts expired at some of the nation’s largest nuclear cleanup sites. Most notably was the hotly contested bidding process for the management and operation contract for the U.S. Dept. of Energy’s nuclear cleanup at the Savannah River Site in Aiken, S.C. The two main contenders were a team lead by Fluor against one led by the Washington division of URS. DOE awarded the contract to Fluor in January, but URS challenged the action. The former Washington Group International had possessed the contract since 1989, and argued to the Government Accountability Office that there were irregularities in the bid process. GAO dismissed URS’s claim in April, and the Fluor-led team, Savannah River Solutions LLC, took the nearly $4-billion contract, which with five, one-year renewable options could run as much as $8 billion.

But none of the major firms went home empty-handed this year in the sector. In May, a team led by URS won the $7.1-billion, performance-based contract for management and remediation of the underground storage tanks at the Hanford Site in southeastern Washington State.