The project objective is to design, construct, install provide operator training and start-up a circulating fluidized bed combustion system at the Lebanon Pennsylvania Veteran`s Affairs Medical Center. This unit will co-fire coal and hospital waste providing lower cost steam for heating and possibly cooling (absorption chiller) and operation of a steam turbine-generator for limited power generation while providing efficient destruction of both general and infectious hospital waste. Operating permits will be obtained after construction has been completed. The stack sampler has been selected. This vendor is currently developing the testing protocol. Severe weather in December and January caused work delays to the project, especially to outside work The fabrication and installation of the stack are complete. Only the insulation of the stack remains to be done. Budget problems began to occur in late January. Correction of this situation should occur shortly in February or March. A current schedule for the project is included with this report.