The price to build rail transit stations on Oahu’s west side continues to soar past the official budget estimates of just a few years ago.
On Thursday, Honolulu Authority for Rapid Transportation board members gave their initial nod to an $18 million agreement with Nan Inc., the local firm that’s building six of the rail line’s nine westernmost stations.
That deal would resolve about 150 outstanding issues relating to those stations’ construction, according to Frank Kosich, HART’s deputy director for design and construction.
If the full board approves the agreement later this month, it would raise the total change order tally for those nine western stations to nearly $59 million, an increase of about 25% on the original price when their construction contracts were first signed.
“That’s a pretty significant increase,” HART board vice chairman Terrence Lee said Thursday, specifically referring to the trio of stations at the line’s western end. That trio will see their costs rise by at least $31 million if the resolution with Nan gets final approval.
Lee said that Andrew Robbins, HART’s executive director, told him that the stations’ original budget estimates had been calculated with “incomplete design drawings.”
“It is what it is,” Lee added. “It’s kind of a similar story with why the project went from $5 billion to roughly to $8.1 billion in capital costs.”
Indeed, HART officials acknowledged last year that some station design budget estimates were mere “placeholders” as they approved change orders to nearly double their amount.
The west side stations’ costs are almost certain to continue to rise. Kosich said the agreement does not cover all of Nan’s outstanding claims. He expects to bring to the board a similar resolution agreement with Hawaiian Dredging, the firm building the remaining three west side stations, sometime in the future.
The big cost increases still fall within rail’s $8.3 billion construction budget, however, and they’re covered by its contingency fund, officials added.
Much of the cost has to do with the persistent “interface” issues, where the stations’ design and the rail line’s driverless trains, communications and signaling systems didn’t fit well together.
The surprise discovery of utility lines where they weren’t supposed to be has also led to hundreds of days of delays — and millions of added dollars in costs. Kosich said he would provide the board a more detailed accounting at the next full board meeting.
HART officials predating Robbins, Kosich and Lee were stunned in 2014 when the lowest bid to build those nine west side stations came in at $294 million — about 60% more than they had estimated.
In response, they canceled that solicitation and broke the stations up into three sets of three, convinced the move would drive down costs.
At first, the move appeared to work. By November 2015, when the bid to build the final trio of stations was awarded, the price to build all nine stations came in at $250.8 million.
“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.
Since then, however, the costs have soared amid the incomplete designs. In addition to the construction change orders, HART officials approved and added $36 million in guideway and station inspection work.
That was largely needed for San Francisco-based PHG Wong to handle work on all nine stations simultaneously, instead of sequentially, as originally agreed.
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