include many experimental features. It is most difficult to foretell at this time whether or not major repairs or modifications will be needed. Therefore, it is further requested that the $100,000 management and operating deduction be restored in order to permit full operation of the plants during the next fiscal year.

APPLICATION OF HOUSE CUT

Mr. MACGOWAN. The point that you are discussing, the request for $1,750,000, is indeed the same as was requested last year. As you are aware, I am sure, we have two budgets within the office, this being the research and development budget.

We have really no proposal at this time other than the fact that we should like to read this paragraph:

The House of Representatives has reduced this request by $250,000.

This $250,000 relates to the second budget. There has been no reduction in our budget if I understand your question correctly, for research and development. The reduction has been in the demonstration-type budget. Does this answer your question?

Chairman HAYDEN. I just wanted to get clear what you had in mind. Mr. MACGOWAN. At this time we are essentially discussing the budget which was presented before I came on the scene, and the Secretary is discussing now with his staff any further legislative changes he may recommend to the Congress.

Our discussion right at this time is limited to the budget request which was prepared and sent in before my advent.

Chairman HAYDEN. For a long time, we have had this matter of the conversion of saline water under consideration. There is no doubt about the importance of the subject because water is getting to be scarce everywhere.

WRIGHTSVILLE PLANT

I note in the estimate that part of the funds are needed to continue cooperation with the State of North Carolina in development of a site at Wrightsville Beach as a pilot plant test site. It is my understanding that the land necessary will be available through local cooperation; is that correct?

Mr. MACGOWAN. Yes, indeed. The city of Wrightsville Beach and the State of North Carolina are cooperating with this Office in developing the site to make it practicable for a test site as well as the erection of the pilot plant there.

CONSTRUCTION BUDGET AND HOUSE REDUCTION

Chairman HAYDEN. The budget request for construction for the Office of Saline Water for fiscal year 1962 is $4,800,000, an increase of $2,490,514 over last year's request. This justification will be placed in the record. The House reduced your request by $250,000. You are appealing from that reduction. One of the reasons given by the House for cutting this estimate is that you are saving about $115,000 on a construction bid. Would you comment on this matter, as well as on the proposed reduction in operation and maintenance and in the allowance for contingencies?

(The justification follows:)

Program objective

OFFICE OF SALINE WATER-CONSTRUCTION

HIGHLIGHT STATEMENT

Public Law 85-883 provides for the construction, operation, and maintenance of not less than five saline water conversion plants. Three of these plants are for sea-water conversion and are to be located, respectively, on the west coast, gulf coast, and east coast. Two other plants are for brackish water conversion and are to be demonstrated in the northern Great Plains and arid Southwest. Each plant is to demonstrate a different process. Construction is to proceed as rapidly as possible after processes are selected, as provided in the law. Program status

The demonstration plant program has been fully implemented. All five processes were selected on or before the dates established in Public Law 85883. Four of the sites were chosen and part of the work completed for the selection of the east-coast site, from sites suggested by nearly 200 community applicants representing every sea-coast State and 12 inland States. The specifications for the first three plants were completed and issued. As a result, the first plant at Freeport, Tex., is now under construction and the construction of the next two demonstration plants, for San Diego, Calif., and Webster, S. Dak., will commence shortly.

Fiscal requests

Requests are made for fiscal year 1962 to provide for construction of the Roswell, N. Mex., and east coast demonstration plants which are to be designed in this present fiscal year.

In addition, funds are requested for operating the first plant for a full year and the second and third plants for two-thirds of fiscal year 1962.

Administration funds requested will enable a continuation of the present level of staffing plus one additional field engineer.

LANGUAGE CHANGES

The proposed change in the reference to the authorizing legislation is merely to substitute the United States Code for the statute reference for the act of September 2, 1958.

It is also proposed to include in the item covering the construction of saline water demonstration plants, language providing for the operation and maintenance of such plants.

At such later time as the Office of Saline Water has had experience with respect to operation and maintenance costs of the demonstration plants, we propose to give consideration to setting up a separate appropriation item for operation and maintenance and a separate one for construction. This would be consistent with the appropriation pattern under which the Department now operates.

Public Law 85-883 provides for the construction, operation, and maintenance of not less than five saline water conversion demonstration plants. Three of these plants are for sea water conversion and two for brackish water conversion. Each plant is to demonstrate a different process. Construction is to proceed as rapidly as possible, after processes are selected, as provided in the law.

Three of the demonstration plants will be under construction and the remaining two will be designed during this fiscal year. The estimate of $4,800,000 reflects an increase of $2,760,000 over the appropriation for the current fiscal years to carry forward the program presently underway.

Construction, $3,500,000

The first demonstration plant under construction is at Freeport, Tex., and is 60 percent completed. It will demonstrate the "long tube vertical multiple effect" process and will convert sea water at the rate of 1 million gallons per day.

The second plant is at Point Loma in San Diego, Calif., and will demonstrate the "multistage flash distillation" process. It too will produce 1 million gallons per day of converted sea water. Bids for this plant were opened on October 18, 1960. The construction contract for this plant was awarded to the low bidder in the amount of $1,608,000.

The "electrodialysis" process will be used at Webster, S. Dak., to convert brackish water at a fresh water output of 250,000 gallons per day. Bids for this plant were opened on October 4, 1960. The construction contract for this plant was awarded to the low bidder in the amount of $482,000.

The fourth demonstration plant will be located at Roswell, N. Mex. The "forced circulation vapor compression” process will be used to convert a particularly difficult brackish water at an output rate of up to 1 million gallons per day. The design for this plant will be completed and issued for bidding by June 30, 1961.

The fifth plant is to be located on the east coast for sea water conversion and will demonstrate a "freeze demineralization" process. Its rated output will be between 250,000 and 500,000 gallons per day. It will be designed during this fiscal year.

Construction funds have been appropriated for the first three plants and this estimate therefore provides $3,500,000 for the fourth and fifth demonstration plants.

Operation and maintenance, $1,100,000

It is anticipated that the Freeport plant will be in operation during all of this fiscal year and that the San Diego and Webster plants will be in operation for two-thirds of the fiscal year 1962. Therefore, $1,100,000 is being requested to cover the costs of operation for those three plants. Any moneys received from the sale of water will be returned to the Treasury.

Administration, $200,000

The staff needed to administer the demonstration plant program is virtually complete and is complemented by the research and development staff. The $200,000 requested for this activity provides for maintaining the staff at its present level plus an additional amount for one more field engineer.

There follows a table showing the distribution of $4,800,000 for construction, fiscal year 1962.

1. Construction (2 plants).

2. Plant operation (1 plant full time, 2 plants partial).

3. Administration___.

Total_____

$3,500,000 1, 100, 000 200, 000 4,800,000

Mr. MACGOWAN. Yes, sir. The $150,000 that you specifically refer to we touch on in our statement. To apply the statement, this includes a disallowance by the House of $150,000 of construction estimates which was based on the belief that there would be available carryover funds from the amounts appropriated for plants 1, 2, and 3. This reduction may jeopardize the construction of plants 4 and 5 as the carryover construction funds may very well be required for changes to plants 2 and 3, as actual construction of these plants has just started.

Chairman HAYDEN. In other words, what you had was an estimate of what the cost would be, but actually you have not undertaken the

work?

Mr. MACGOWAN. That is correct.

Chairman HAYDEN. And you are not sure you could do it for what you thought you could?

Mr. MACGOWAN. The fact that the $150,000 was disallowed puts us in the rather precarious position in that the exact amount of the bid

Chairman HAYDEN. Isn't it $115,000?

Mr. MACGOWAN. That is right. There is a second referral to $35,000 as a contingency which we combined as $150,000 because of the facts. In other words, we have no latitude in which to move and if conceivably the carryover funds did not exist-and they may not, since we have not actually done the work-the probabilities are that any major modification to these plants will have to be the subject of another request for appropriations.

ACTUAL CHANGE IN SPECIFICATION

Chairman HAYDEN. What puzzles me is how in the first place this $115,000 estimate was made. You had a construction bid, but that was a bid made on certain specifications. When you actually go to work on it, you may want to change the specifications. Is that

correct?

Mr. MACGOWAN. At the time these bids are made, the bids are made on the basis of what we and the contractor consider to be the best specifications and the most economic way to do the plant. As we come to actually physically doing the work, we are quite often wrong.

Mr. Cywin, here, is the Chief of the Demonstration Plant Section, and he tells me at this very moment field construction has not yet started at San Diego, but we now have a change order which we are negotiating with the contractor, and this was not previously envisioned.

NO ESTIMATE ON POWER TIE-INS

Mr. CYWIN. I will address myself specifically to this change order to show you how these things develop in such a program. At San Diego-we got the land from the Navy. To get power we had a choice of overhead power lines which the San Diego Power & Gas Co. might have put in for us, or an underground connection to a Navy line. But the Navy has nearby a Naval Electronic Laboratory. Therefore, while we were drafting our specifications, we did not get from the Navy exact specifications as to how to tie in powerlines. We went ahead with the project rather than delay over this one point.

We now have the Navy electronic interference study and the result is that we have to go to an underground line which is a costly way of doing it. As a result, we now know how to get power to our plant site. As a result, we have to negotiate a change order with the contractor for the power tie-ins and also shield them electronically. Chairman HAYDEN. That will cost how much more?

Mr. CYWIN. $22,560. This is an example of the things you run into. Chairman HAYDEN. That appears to be a good example.

How much is to be allowed to construct the fourth and fifth demonstration plants in Roswell, N. Mex., and Wrightsville Beach, N.C.

ANTICIPATED FUNDS NEED

Mr. MACGOWAN. The remaining construction we anticipate will be about $3,500,000 for the construction of these two plants.

Chairman HAYDEN. Will you please place in the record again this year, as you did last year, a tabulation of the status of each of the demonstration plants and include any statement as to local participation in them.

Mr. MACGOWAN. I will be happy to. This can be done very easily.