Honolulu received more welcome news Tuesday when transit officials opened bids to build three rail stations along the city’s $6.6 billion project corridor from East Kapolei to Ala Moana Center.
Three of the four bids came in within the Honolulu Authority for Rapid Transportation’s estimated range of $100 million to $125 million, allowing officials to rest a little easier about their plans to fight skyrocketing costs.
Watts Constructors, of McLean, Va., was the presumptive low bidder on the three-station package with a $112.7 million offer. The three stations will be located at Aloha Stadium, Pearl Ridge and Pearl Highlands.
Officials initially wanted to include the three stations in a nine-station bid package, but found out in August 2014 that their estimates were too optimistic when the lowest offer was $110 million more than anticipated, or about 60 percent over budget.
HART cancelled the bid and broke the package into three, three-station chunks in an attempt to save money by increasing competition and giving more flexibility to contractors. The theory was that the smaller bid packages would allow more companies, particularly smaller ones, to apply for the work.
The strategy appears to have worked. The original price estimate to build all nine stations was $294.5 million. When broken into smaller station packages the total amount of the three contracts, including the recent bid from Watts Constructors, is $247.8 million.
“The good news, I would say, is that I think our staff has finally gotten our arms around where we see the costs climbing,” HART Executive Director and CEO Dan Grabauskas said after the bid opening. “To me (there are) several good indications that our bid documents are better; we’re talking the language of the construction companies; there’s a good amount of competition (and) prices are where we want to see them.”
Missing from the overall bid package, however, is an off-ramp that HART decided to bid separately for a price of $5.2 million. That cuts into the savings, Grabauskas said, but it still means HART’s plan shaved about $41 million off the original nine-station bid.
HART officials still must make sure Watts Constructors’ bid meets all specifications before awarding the contract. Other companies also can challenges to the award. Any such challenge could delay a final award by three to four months.
Hawaiian Dredging Construction Co.
Watts Constructors LLC
But even with the seemingly positive bid openings, there are still many uncertainties when it comes to figuring out the final price of the project.
Two of the larger bid packages — which include guideway and station construction from Honolulu International Airport into downtown — have yet to come in. And with any large-scale construction project there are possibilities of unexpected cost overruns, such as for utility relocation.
Grabauskas said HART does not have an estimated cost range for the upcoming contracts.
The Honolulu City Council is debating whether to extend a 0.5 percent general excise tax surcharge by five years to 2027 to cover the shortfall. But leaders on the council, including Chairman Ernie Martin and Budget Committee Chairwoman Ann Kobayashi, still have lots of questions about the viability of the project.
Marin has proposed placing a $910 million cap on five-year GET surcharge revenues as a means to control costs, but officials say that’s not enough to cover the current shortfalls. He’s also mentioned the idea of flouting the Federal Transit Administration by shortening the route or otherwise altering it to cut costs.
The FTA has given Honolulu a $1.5 billion grant to build a 20-mile, 21-station commuter rail line with 80 train cars. Anything short of that and the agency says the city risks having to pay back or forego those funds.
The FTA has already said it will withhold $250 million in grant money until the City Council approves the GET extension or comes up with another local funding source.
Honolulu Mayor Kirk Caldwell opposes Martin’s proposals, saying that he believes the city needs both the full amount of the GET extension and the federal funds in order to complete the project as promised.
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