Next Boondoggle: Useless $240M Kalaeloa Desalination Plant

by Andrew Walden

Hawaii has no shortage of fresh water and never will.  The mountains are big bags of water just waiting to be drilled.

So why is Honolulu BWS working with a Cayman Islands company to build a useless $240M desalination plant at Kalaeloa?

Desal is an energy hog and Hawaii has the most expensive electricity in the USA.

The plant is being proposed only as a means to soak up excess daytime solar production on Oahu.  The solar lobby wants to extract every dollar it can from its’ ‘curtailed’ production -- and if that means a $240M boondoggle and higher water bills for Oahu consumers, so be it.

The Cayman Compass May 22, 2025, reports:

The Honolulu Board of Water Supply, the client, approved the results from a small pilot plant built by Kalaeloa Desalco, a wholly owned subsidiary of Consolidated Water….

The move paved the way for construction to start on construction of the small- to medium-sized plant, which will produce millions of gallons of fresh water every day to supply an industrial estate in Honolulu.

“We are hoping as soon as we get the final permit we will start construction. It’s really a race to get it done. The faster we can do it, the better it is for us,” McTaggart said.

The contract has the potential to extend to 30 years, as it called for construction and management for 20 years, with the possibility of two five-year extensions.

McTaggart added there was potential for more work in Pearl Harbour, famous as the site of a major US Navy port and air station, where a surprise attack by the Japanese in 1941 brought the US into World War II.

The CEO said there was a long-term plan in Hawaii to diversify water sources because of pollutants, such as leaks of aviation fuel, over decades.

In an August 21, 2025, earnings report conference call with financial reporters, Consolidated Water executives explained:

…In April, the Honolulu Board of Water Supply or BWS, our client on our multiyear seawater desalination project in Hawaii, approved our pilot test reports and recommendations and concluded that the desalinated water we produced during the piloting phase is a reasonable match to their existing water supply. And further that desalinated water from the new plant would not cause any detrimental impact to their distribution pipes or customer assets. So this significant milestone in the project paves the way to begin construction once final design approval and the requisite permits have been obtained. In June, we submitted our 90% design for the project to BWS and very shortly afterwards received comments from their engineer and various consultants.

We are currently addressing these comments and plan to submit our responses shortly in keeping with the project schedule, so that should advance the design process. We presently expect to begin construction of this project early next year once BWS issues a notice to proceed with construction. And on a cautionary note, some of the permits required before construction can start must be obtained by our client and are therefore outside of our control, and delays in obtaining any of these permits could also delay the construction start date. The construction phase of the Hawaii project is expected to generate the largest portion of revenue from this project and once commenced will be a major growth driver for our Services segment in 2026 and 2027. …

…there’s two big … permitting issues at this point. I’ll give you a little bit more detail. So there’s the archaeological permit that we need for the site, and we always expected that that was gonna take a long time to get. We had to do studies, you know, to ensure that we weren’t gonna damage any historical artifacts or areas on the site or there weren’t any, you know, ancient graves or anything like that on the site. So those those studies have been done, and we’re just working its way through the the regulator and the approval process.

So we always knew that was gonna take a while, and that’s kind of what we’ve always talked about being the critical path on the permit. The second thing, I think, that’s very important is now that the design is essentially finished, we have to submit that to the the health department there to get final approval for for the water supply. And, you know, that could take some time. It may go quickly. … we we haven’t been to the to the point that we could do that until until we finish the design, which is gonna happen, I think, in the next month or two….

---30---

2023: Water Bills Going Up: BWS Signs $204M Kalaeloa Desalination Contract

BWS: Kalaeloa Seawater Desalination Facility Design-Build-Operate-Maintain & Related Engineering Services

MSN: Consolidated Water’s stock shoots up toward a 15-year high as Hawaii desalination contract prompts analyst upgrade

REALITY: Desalination is an expensive energy hog