Hitachi Rail, formerly known as Ansaldo, is based in Italy — the nation hardest hit in Europe thus far by the virus. Its supply chain, meanwhile, involves China, where the COVID-19 disease cases first originated and where most virus-related deaths have occurred.
That chain is, in part, “suffering” from a blockade imposed by the Chinese government, the memo stated.
Hitachi Rail has a $1.4 billion contract to build Honolulu’s driverless trains and the rail line’s communications and signaling systems, as well as to operate the line for its first 13 years.
It’s not clear whether the firm’s virus-related issues might impact the city’s goal of opening the rail line for partial service later this year — neither the memo nor an accompanying letter sent to HART went into detail.
Robert Beadle, the project director at Hitachi Rail Honolulu, did not respond to requests for comment Thursday.
However, at this point Hitachi Rail is sending a clear message to HART: It believes it should be exempt from any liability because it considers the virus outbreak to be a “force majeure” event — something massive that is beyond its control.
Thus, Hitachi warned HART, it shouldn’t have to pay the subsequent penalties and damages stemming from any coronavirus delays. The firm cited language in its contract with the city that covers such situations.
HART, meanwhile, has already signaled that it would hold Hitachi liable.
“HART respectfully does not agree with the HRH assessment,” the local agency said in a statement Thursday. “HART will respond to HRH and provide its position in the next few days.”
HART and the city already agreed to pay Hitachi an additional $160 million to make up for more than five years of construction delays that hampered the firm’s progress on rail.
‘In Regards To Construction, It’s Construction’
The latest Hitachi issue arose during a brief discussion at the HART board meeting Thursday of how COVID-19 might affect progress on a massive project that is already at least six years behind schedule.
Some companies and government agencies are responding to the virus by allowing employees to work from home to help prevent its further spread. HART has already met with its staff internally on the matter and is considering similar steps, Executive Director Andrew Robbins said.
But “in regards to construction — it’s construction,” HART Project Director Sam Carnaggio told the board. “You have to get out there.”
HART and the city will have to defer to its construction contractors and their individual policies to deal with the virus, he said.
“There is a good chance that if it continues like this, it could affect the project,” Carnaggio said. “It’s quite complex but we’re starting to plan for those contingencies.”
Terrence Lee, the HART board’s vice chair, also worried that the virus’ impacts on Hawaii’s tourism-dependent economy might impact state tax revenues. Rail depends on the state’s general excise and transient accommodation tax for the bulk of its more than $9 billion budget.
Nathaniel Kinney, executive director of the Hawaii Construction Alliance, said he’s not aware of any other local projects affected by supply chain issues related to the coronavirus or workers being kept off building sites for their protection against the virus.