Defence will pay for the first 10 years of operating the new Katherine water treatment plant.
The deal made with Power and Water was revealed in NT Government Estimates hearings this week.
The Defence Department has already agreed to pay for the US-made plant, estimated to cost $15 million, expected to treat all of Katherine's drinking water when operational early next year.
But the agreement to pay for the operation of the plant has never been made public before.
Katherine Times believes it was the negotiations over this payment which led to delays over the past year in securing the go ahead for the full-scale plant.
It has been three years since it was discovered potentially harmful PFAS chemicals leaking from the Tindal RAAF Base have polluted the town's drinking water.
The chemicals were contained in firefighting foams once used in training at the base.
A smaller plant was rushed in as an emergency late in 2017 but it only cleans PFAS from about a tenth of the town's water.
Water restrictions were hurriedly applied in August 2017 to guarantee safe supplies.
Those restrictions are necessary again this year until the new plant is operational.
The technology of the new plant is expected to be similar to the existing ECT2 emergency plant, capable of cleaning PFAS from about one megalitre of bore water per day.
The new plant will be capable of processing 10 megalitres per day, or all of Katherine's drinking water requirements.
Speaking to Estimates hearings this week, Power and Water chief executive Michael Thomson confirmed Defence is paying the $15 million for the bigger plant.
"There are also operational costs which are the day to day running costs.
"Defence are funding the first 10 years of that at $3.47 million for the running costs. Plus they will supply the resin and that is the most expensive component of the running cost."
The resin is used in the ECT2 process to remove the PFAS from water, chiefly sourced from the Katherine treatment plant's two contaminated bores.
Mr Thomson said after 10 years "there will be another discussion" for the following decade about the operational cost "and their contribution to that".
He also said Defence had agreed to remove, destroy and replace the resin.
"If at the end of the day Power and Water have to pick up some of those costs, Defence have agreed to reimburse us."
Power and Water Corporation Board chairman John Langoulant told Estimates he was happy a long-term solution to the PFAS contamination of Katherine ground water had been found.
"As we have recently announced the long lead items for this plant have been ordered from the US and the current program is scheduled to have the plant up and running early next year," he said.
"I appreciate it has been almost three years since we started detecting PFAS in the ground water in Katherine and I thank the community for its continued patience while we searched for a reliable long-term solution.
"I also understand that three years may seem like a long time, but to go from nothing to a fully designed solution treating a contaminate that until then was relatively unknown in the utility sector to a fully designed solution on its way is an extraordinary effort by the whole team."
Power and Water is planning to have a small scale model of the town's new plant for viewing at this year's Katherine Show.
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