Katherine's new $15m water treatment plant is under a coronavirus cloud.
Water officials were hoping to have construction of the plant well advanced by the middle of this year but there are now fears pandemic restrictions may have caused further delays.
An update on the long-awaited project is expected next month.
Power and Water officials in February told Katherine Times their earlier projections for a 2019 finish to the project were "overly optimistic".
Most of the construction work has not even started yet, with some key contracts yet to be awarded, although preparation works on the site are done.
In February, officials said the plant would be operating to about half its capacity by the middle of this year, but that is no longer certain.
Power and Water's senior water and waste water engineer Skefos Tsoukalis said work was steadily progressing on the new water treatment plant.
"Various tenders for the construction phase of the project are currently being finalised, the process plant building tenders were issued recently and we anticipate award of these tenders next month," he said.
"The long lead pressure vessels and treatment resin arrived from the USA in April and they have now been delivered to Katherine ready for incorporation into the treatment plant building when completed.
"The tender for the supply of the larger process tanks has been awarded and site construction of the tanks is anticipated to commence next month."
Katherine again entered a new dry season after a shocking wet season after water restrictions were first applied in 2017 because of PFAS contamination.
Katherine is believed to still be the only town in Australia on water restrictions because of PFAS.
Residents were hopeful the new plant would be operational during the crucial later and hotter period of the 2020 dry season when water supplies are most scarce.
Katherine's drinking water is mostly taken from the Katherine River but is supplemented by two contaminated bores at the treatment plant.
The plant is designed around three series of tanks, or "trains" as they are called by water engineers.
Each train can remove PFAS from five megalitres of water every day.
The plant is designed to produced 10 megalitres of super clean water for Katherine each day, with the third train of five megalitres, as an added redundancy to allow for maintenance on the other trains.
The plant uses the same ECT2 technology being used in the emergency plant rushed to Katherine in August 2017 which treats just one megalitre of water a day.
There are two similar one megalitre plants already in operation at the Tindal RAAF Base trying to reduce the amount of PFAS still leaking off the base into the aquifer.
The Katherine water treatment plant is being paid for by the Defence Department.
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