In 2015, as Honolulu rail faced its first wave of daunting cost increases, project leaders devised a new strategy aimed at trimming the price to build the nine westside stations.
For a time, the move seemed to work.
Since then, however, change orders for the station work have piled up — and any savings the Honolulu Authority for Rapid Transportation hoped to reap from that strategy have evaporated.
The latest such change order, a $4.7 million cost increase to build rail’s three Ewa-most stations, was approved by the HART board Thursday. It aims to compensate rail contractor Nan, Inc. for 235 days’ worth of construction delays, estimated at $20,000 a day.
The delays stem to February 2017, when crews discovered that underground water lines near the future stations weren’t where engineering firm AECOM had put them in its rail plans, according to Frank Kosich, HART’s design and construction director.
That problem led to several months of added design work in early 2017. Then, crews had to wait until September 2017 — the next available time that Hawaiian Electric Co. could shut off the overhead power lines there — to relocate the power lines underground, Kosich said.
Meanwhile, Nan had to wait for that process to finish before it could start building stations.
HART’s contingency fund, part of its $8.16 billion budget, will cover those costs, according to the agency’s executive director, Andrew Robbins. HART is currently aiming to launch interim service along the first 10 miles of the route, from Kapolei to Aloha Stadium, by the end of 2020.
In 2014, HART officials were stunned when the bids they opened to build all nine westside stations came in more than $100 million over their budgeted amount. It was a sign that the project would soon face serious financial trouble.
But HART regrouped — literally. The rail agency canceled its original bid proposal and divided the nine stations into three separate groups, figuring that more construction firms could bid on the smaller work packages and thus offer lower, more competitive prices.
At first, the move appeared to pay off: By November 2015, when the bid to build the final trio of stations was awarded, the price to build all nine stations appeared to be $250.8 million. That was $43 million less than the bid to build all nine stations together.
“The good news, I would say, is I think our staff has finally got our arms around where we see the costs climbing,” HART’s then-CEO, Dan Grabauskas, said at the time.
Those cost reductions have disappeared, however. HART’s latest project report for November shows that the nine westside stations have seen some $18.5 million in change orders, including the $4.7 million increase that the board approved Thursday.
Additionally, HART has had to boost its contract with San Francisco-based PGH Wong, which inspects westside station and guideway work, by an extra $36 million, on top of its original $54 million deal. That’s largely to cover the costs for PHG Wong to handle work on all nine stations simultaneously, instead of sequentially, as originally agreed, HART officials explained last year.
It’s also a direct result of the decision to split the nine stations into three separate packages, they said.
On Thursday, Robbins said that the project could expect to see more change orders related to westside station work in the future as HART looks to solve other design issues.
The HART board also met in executive session for about two hours Thursday, in part to discuss the agency’s possible condemnation of properties in town. The owner of one such property on South Street, Servco Pacific, submitted written testimony expressing its continued frustration with the process.
“Not only has Servco’s contact person with HART changed several times, but it seems that any time Servco has had any settlement discussions of substance with HART … some fairly major changes or modifications have occurred in HART’s negotiation position from the prior discussions,” Casey Ching, Servco’s Vice President for Corporate Properties, wrote to the board.
The board also received a closed-door update Thursday on what’s known as the Navy Drum site — a patch of Department of Hawaiian Homelands-owned land in Waipahu where the city has already built rail’s future 43-acre operations center.
The city still hasn’t acquired the property.
HART’s former board chairwoman, Colleen Hanabusa, had flagged that as a potentially big issue in 2015, warning that U.S. Department of Interior officials might not approve a proposed land-swap for the city to own the property.
The board did not provide any updates on the matter after its executive session.
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