The breach of contract will most likely result in a deadline extension, Sitka city officials say.
By Brett Walton
Circle of Blue
For the third time in four years, True Alaska Bottling (TAB)–a company attempting to pioneer regular bulk water shipments from a lake near Sitka, Alaska to a distribution hub on the west coast of India–has missed the deadline for a minimum annual shipment.
The contract stipulated that TAB and its San Antonio-based partner, S2C Global Systems, move 50 million gallons by December 8, but no water has been shipped in the four years since a contract was first signed with the city.
The Sitka assembly has sent a cure letter to TAB, according to Garry White, executive director of the Sitka Economic Development Association. The letter gives 45 days upon receipt to fix the default. The assembly can then decide to either cancel or extend the contract.
“I don’t know what the assembly will do,” White said in an interview with Circle of Blue. “In the past, they have [extended the contract]. I don’t see any reason why they wouldn’t again, but it’s up to them to make that decision.”
Jim Dinley, Sitka’s municipal administrator, said the city will likely amend the contract.
“Why wouldn’t we?” he told Circle of Blue. “There is an indication that TAB will apply for an extension, but that’s still a month and a half away.”
TAB’s chief executive, Terry Trapp, declined an interview request from Circle of Blue.
In 2006, TAB first signed a contract with the city of Sitka. The company missed its first shipping deadline in 2008 and another in 2009. The city extended the contract each time, and last year it increased the export minimum from 20 to 50 million gallons, imposing a $100,000 fee for amending the contract.
The contract gives TAB the rights to nearly 3 billion gallons of water from the Blue Lake reservoir, annually. While other companies have shown interest in the 6.2 billion gallons remaining for export, White said the city has not received any serious formal proposals.
The high cost of shipped water, daunting logistics, and concerns about relying on foreign suppliers have many water experts skeptical that shipments from Alaska will happen. In an interview with Circle of Blue in August, S2C president Rod Bartlett said the cost of buying water from Sitka, loading it, shipping it, and unloading it in India would total $0.07 per gallon–significantly more than desalinated water, which is produced for around $0.01 per gallon at its most expensive price.