By Austin Business Journal

A Travis County judge has granted a plea from the city of Austin to forgo a lawsuit regarding a contract to demolish the defunct Holly Street Power Plant in East Austin.

San Leandro, Calif.-based CST Environmental LP filed the suit Dec. 28 saying the city did not explain why its $13.8 million bid, the lowest submitted, was passed up for a $24.9 million offer from Austin-based TRC Environmental Corp.

CST sent a formal protest to city officials on Dec. 9 asking why they were not interviewed for the job, but the city denied the complaint without a hearing, said attorney Tom Nesbitt of DeShazo and Nesbitt LLP, who filed the suit on behalf of CST. The company asked on Monday for a hearing in court by Jan. 12, a day before council was set to vote on the contract.

The judge instead, granted the city's plea of jurisdiction, effectively dismissing the case. The decision does not apply to the merits of the case, Nesbitt said, but rather says the court will not have jurisdiction until a contract is actually signed. A copy of the decision is available here.

Austin City Council members are scheduled to discuss the demolition contract Jan. 13. They could decide to begin negotiating a contract with TRC Environmental., as recommended by the cityâ¿¿s Electric Utility Commission, or another bidder, or none at all.

If the city does sign a contract, CST intends to refile the lawsuit, according to Nesbitt. The company was one of six companies vying for the contract â¿¿ originally budgeted at about $10 million â¿¿ but was dropped from the process in November without an interview.

The contract is to remove the 50-year-old plant and salvage or recycle material such as steel, copper, scrap metals, concrete and asphalt. The demolition is expected to take about 18 months, according to Austin Energy. The city has not said what will be done with the vacant 22-acre lot, other than a portion will be set aside for park space.

Copyright 2011 American City Business Journals

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