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This time last year, Navy officials had hoped to scuttle the aircraft carrier Oriskany 22½ miles southeast of Pensacola Pass as the world's largest artificial reef project.

Congress had committed $2.8 million to turn the 888-foot flattop used in the Korean and Vietnam wars into an international fishing and diving destination, the pilot project for a new program to cheaply dispose of decommissioned vessels to the benefit of coastal communities throughout the country.

Twelve months later, the Navy has spent $12.73 million, more than 4½ times the original budget. The bill is growing, and there still are no guarantees the costly efforts will come to fruition.

As for the Oriskany, which was moored at the Port of Pensacola for seven months awaiting a sink permit from the Environmental Protection Agency, it was towed in June to Beaumont, Texas, to ride out the hurricane season. Although Hurricane Rita hit near Beaumont, the ship escaped damage.

When the Oriskany project was first announced, Pensacola's tourism, fishing and diving industries were giddy with expectations of an economic bonanza from the thousands of tourists from around the world expected to be drawn to the reef.

Now, many of those with a stake in the project are frustrated and cynical, saying the Oriskany saga has become the epitome of bureaucracy.

"It's far beyond mind-boggling. No matter what you try to do, it's just red tape after red tape after red tape, and it never, ever ends," said Paul Redman, president of the Pensacola Charter Boat Association.

"With all the money we've sunk into this thing, we probably could have built three replicas out of clean steel. It might be funny if there weren't so much money involved."

Retired Vice Adm. Jack Fetterman, who was instrumental in luring the Oriskany to Pensacola, said he has pleaded with officials for months to "just sink the thing and be done with it."

"I don't think the Navy expected in their wildest dreams it would be this difficult," he said. "I would not like to be the program manager trying to explain to my boss how the price has become this astronomical. But I've got a certain comfort level that it will be back. They've got too much invested in it."

In defense of the repeated delays and escalating cost, Navy and EPA officials point out that the Oriskany effort is the first of its kind, the precedent for a potentially large-scale artificial reefing program.

Retired ships currently are scrapped, transformed into museums, sold to allied foreign militaries or sunk in Naval fleet exercises. But up to 23 vessels in the Navy's Inactive Fleet and others in the custody of the Maritime Administration could become eligible for reefing if the Oriskany project is completed successfully.

"We want to get it right the first time so we can use it as a model to streamline the process for future ships," said Pat Dolan, department director for the congressional and public affairs office of the Naval Sea Systems Command, which oversees the Inactive Fleet.

Even at $12.73 million, Navy officials say, the Oriskany reef would be a bargain. Under the current options, scrapping a ship its size normally would cost $24 million, Dolan said.

Pensacola lobbied for the project

In April 2004, after heavy lobbying, Pensacola was chosen over communities in Mississippi, Texas, South Carolina, Georgia and South Florida as the Oriskany's final resting place

At the time, the 32,000-ton ship was in Corpus Christi, Texas, where it had been towed from Beaumont to be stripped of carcinogenic polychlorinated biphenyls and other hazardous materials and prepared for sinking in September.

Resolve Marine Group/Esco Marine Joint Venture won the $2.1 million contract to remove contaminants. An additional $700,000 was allocated for other expenses associated with the sinking, such as towing.

Crews removed all liquids and 42 tons of bulkhead insulation containing PCBs, but about 700 pounds of the carcinogen remained in the form of rubber products and foam gaskets, electrical cable, insulation, plastics, and applied heat-resistant paint.

The Navy said it couldn't remove the rest without completely dismantling ship, so the EPA said a PCB-disposal permit would be required along with a complex theoretical computer simulation called a prospective risk assessment model that would gauge the impact of PCBs and other toxins on the environment, said Laura Niles, EPA Region 4 spokeswoman in Atlanta. So far, the model has cost $3.25 million and has yet to be approved.

Plans begin to derail, price tag swells

All indications were that things were going according to plan -- albeit a more expensive plan.

In June 2004, Escambia County chief of marine resources Robert Turpin visited Corpus Christi and estimated preparations were 86 percent complete, on schedule for the Oriskany's target delivery to Pensacola in August.

Fetterman had floated plans for a possible live-broadcast, ship-side ceremony before the sinking. He expected more than 2,000 Oriskany veterans to come to town for the occasion and was courting U.S. Sen. John McCain, R-Ariz., who flew from the ship during the Vietnam War, to be keynote speaker.

In late July, Dolan still said the ship was expected to arrive within a few weeks, after the Navy and EPA worked out lingering environmental concerns.

Those lingering concerns derailed the process in August.

That's when the Navy submitted its first risk assessment model for review. The EPA rejected it a month later, asking the Navy to justify its assumptions and validate the theories against real-world data, according to EPA documents.

Also in August, elevated levels of PCBs were discovered in the carrier's wooden flight deck, requiring a major, unanticipated demolition effort.

In an e-mail exchange, Niles said the contamination would have been foreseeable "only if it were known that PCB hydraulic fluids had indeed been used for the original hydraulic catapult system."

The cost of removal: about half of the $7.63 million spent to date on environmental preparations, said Glen Clark, deputy program manager for the Inactive Fleet.

"Our original estimate underestimated the scope of the work on this project," he said.

Scientists called in to assess risks

After the risk assessment model failed, Navy officials had to recalibrate expectations.

The Oriskany would not go down anytime soon as the Navy's scientists sought to address EPA objections to the model and crews worked to get rid of the flight deck.

The Navy set a goal of supplying a revised risk assessment by December, but there would be a new obstacle in the permitting process.

Independent scientists would have to review the Navy's model before the EPA would sign off on it.

"Since September 2004, EPA and the Navy have discussed the need for an effective peer review process," said J.I. Palmer, Jr., administrator for the EPA's Region 4 in a letter responding to questions from U.S. Rep. Jeff Miller, R-Chumuckla, about the delays. "The complexity of the Navy's untested risk model and its intended use for all future reefing determinations necessitates peer review."

Nonetheless, in anticipation of the Navy's new model passing muster, tugboats towed the Oriskany in December to the Port of Pensacola. Several dozen veterans and enthusiasts, who awaited its arrival dockside, cheered.

A tentative sink date was set for May or June, but it would not come to pass either. The Navy missed its December deadline for the model and then another in January.

"This is a complex effort that has never been accomplished before," Dolan wrote in an e-mail. "Delays have been associated with underestimating the full extent of effort and time required to complete and peer review the prospective risk assessment model, and to a lesser extent, the untimely death of the lead model developer in January 2005."

Clark said the scientist's death delayed progress by three or four weeks, but the model remained unfinished. By April, Navy officials had abandoned hope of sinking the ship before the active part of the hurricane season began.

In May, they decided to send the ship back to Beaumont at a cost of $800,000 because of the cost and difficulty of safely securing the ship with a Category 3 hurricane-proof mooring.

At last, on June 16, the Navy submitted its risk assessment model.

Three days later, the Oriskany left for a Maritime Administration port facility in Beaumont. Because Beaumont is a military facility, the docking fees, at $6,000 per month, are a significant discount to the $90,000 per month charged by the Port of Pensacola.

But even that departure was delayed.

Crews had to temporarily undo some of the preparations made to sink the ship. Various hatches and doors cut open for diver safety had to be sealed to keep the Mighty O from taking on too much water during its tow back to Texas.

Risk assessment model under review

Scientists are reviewing the risk assessment model now.

The EPA is expected to schedule a public hearing on the issue this fall, although officials say they have not fielded any environmental concerns about the project, from Greenpeace, the noted environmental activist group, or anyone else.

That hearing would be followed by the EPA's final decision on the sinking permit by mid-January.

Navy officials hope to return the ship to Pensacola early next year and sink it in May.

But, even now, there is no assurance the EPA will issue the sink permit.

The EPA could find fault with the risk assessment model, and more remediation may be required, said Mark Fite, chief of the toxic substances section for EPA's Region 4.

But Fite said: "There is a cost associated with removing more material. There is a limit the Navy will reach."

Fetterman said there's enough blame to go around for the delays in the project.

The Navy missed deadlines for its risk assessments, and the EPA has changed the requirements at different points in the process.

"The Navy has worked with the EPA hand-in-hand on this project," Clark said. "It's not any agency's fault that the time (has been pushed back.)"

Said Niles: "EPA has been working with the Navy for months to make sure that everything is being done correctly in order to get the permit for the sinking."

Locally, enthusiasm fades into frustration

Locally, enthusiasm for what promises to be a world-class addition to Pensacola's tourist attractions has soured.

"I really don't have any clue why this group of environmentalists working for the government went completely nuts," said Edwin Roberts Jr., a Pensacola chiropractor and past president of the Florida Fish and Wildlife Conservation Commission, who helped Florida win the bid for the Oriskany.

"I'm completely at a loss. There have been big ships sunk all over the world and there's never been a recorded problem. It is good to be sure that we're not doing any harm to the environment with a program like this, but I think we've gone way beyond that.

"We've overdone the due diligence. I think we've stomped on a dead horse too many times."

Redman, president of the charter boat association, doubts the ship will return at all.

"I think you have to be realistic," he said. "I'm hopeful, but I seriously doubt it."

A Mardi Gras float fashioned after the Oriskany sits outside MBT Divers shop on Navy Boulevard, awaiting what would be its third parade this spring. MBT Co-owner Jim Phillips, 41, built the towering gray float even before Pensacola won its bid for the project. His frustration with the delays, however, is offset by excitement over what the real Oriskany -- if allowed -- will bring to the community.

"I think it's going to be a lot bigger than a lot of people realize," he said. "It's going to put Pensacola on the map as a tourist destination for people all over the world."

Carolyn Schmidt, who is co-directing a Discovery Channel documentary on the Oriskany's transformation, decided to pass on filming the ship's most recent trek from Pensacola to Beaumont.

"We've already filmed it being moved twice," she said.

She still plans to make the film and will return for the sinking.

But, she said: "You can't hold your breath, that's for sure."

News Journal staff writer Lynette Wilson contributed to this report.