South Florida water managers halt massive reservoir project, agree to continue paying for it.

Contractors will be paid millions of dollars a month to do nothing while water managers decide whether to proceed with a giant reservoir project that they froze in place Thursday.

The South Florida Water Management District's governing board ordered a halt to digging what would be the world's largest free-standing reservoir and one of the nation's largest man-made water storage projects.

It agreed to pay a flat $1.9 million a month, starting June 1, to the two contractors to recover costs related to the delay.

The district reserved the option of killing the project at any time and paying contractors another $250,000 a month for every month work was stopped.

The reservoir is being dug south of Lake Okeechobee about 12 miles south of South Bay in far southwestern Palm Beach County. It is set to be finished in 2010.

When completed, the 26-square-mile, 27-foot-deep reservoir on 16,700 acres of former sugarcane land would hold 62 billion gallons to help replenish the Everglades and nearby farms.

Environmental groups complained the required blasting would limit options for restoring the Everglades and might let contaminants enter the water supplies.

The district agreed two years ago to pay the Barnard Construction and Parsons firms $400 million. In February, the district heard that price was forecast to rise to $700 million because of skyrocketing fuel prices and more stringent engineering standards adopted after Hurricane Katrina.

The district has spent about $250 million and has authorized at least $330 million more.

In June 2006, the U.S. Army Corps of Engineers gave the district a permit to start work.

In May 2007, the Natural Resources Defense Council along with the National Wildlife Federation and Sierra Club sued the U.S. Army Corps of Engineers in U.S. District Court, claiming the multibillion-dollar Everglades restoration project might be a ruse to fuel massive development and farming that would destroy the very Everglades it is supposed to save.

The suit claimed the corps is ignoring safeguards Congress put in place to ensure the billions being spent will provide water to revitalize the Everglades and not merely drinking water and irrigation for future farms and homes.

The district resolution said it "recognizes the risk and public expense associated with executing the next phase of reservoir construction without legal certainty from the conclusion of the pending legal proceedings."

Stu Appelbaum, a manager for the corps in Jacksonville, expressed disappointment at the board's action but added that "we understand their desire to minimize the financial risks associated with proceeding."

Bradford Sewell, an attorney at the Natural Resources Defense Council, said from New York that he wrote the district as recently as Wednesday that the plaintiffs did not want to delay the reservoir.

"We're a little dumbfounded at this," Sewell said from New York. "Here you've been building this reservoir and arguing to the court, 'We've been spending all this money. Don't stop it, don't stop it, don't stop it.' And then you stop it. They're handing the court an opportunity to say, 'I don't have to worry about stopping Everglades restoration. They stopped it themselves.' "