Shimmick Traylor Granite is already building Honolulu’s rail transit line as far east as Middle Street. Now, project officials are weighing whether to have the firm build a few blocks farther into town to help keep rail work moving.
That contract extension could help ease the $9 billion project’s latest cost and schedule woes, they said. Some of those problems were caused by the COVID-19 pandemic. But rail also faces a costly delay claim from STG unrelated to coronavirus. On Thursday, rail officials disclosed the claim could cost up to $40 million.
They hope the move could address that, too.
The proposal would have STG, which is building four stations and about five miles of elevated track past the airport, build another one-third mile of track ending past Puuhale Road in Kalihi.
Honolulu Authority for Rapid Transportation officials laid out the concept at the agency’s Project Oversight Committee meeting Thursday. So far, it’s “just an idea” that needs more analysis, East Area Construction Manager John Moore told board members.
The work would start early next year. It would add between $70 million and $100 million to Shimmick Traylor Granite’s existing $886 million construction contract, but rail officials said they believed it would save the project money in the long run.
It would also help keep construction going amid the latest, three-month delay to award a so-called “public-private partnership” to complete the rail line to Ala Moana Center.
That award had already been pushed back several times and was most recently slated for May. Now, HART says the pandemic has pushed that award to August. At least two finalists are vying for the contract to finish rail, but they haven’t been identified so it’s not clear what they think of the STG extension idea.
Some of the agency’s board members praised staff for looking at proactive ways to address the project’s latest woes.
They also expressed concerns.
Glenn Nohara, the oversight committee’s chairman, said the board should consult with the city’s corporation counsel to make sure the move didn’t violate procurement laws. The rail project, Nohara pointed out, remains under investigation by federal authorities largely for its change orders, “so we need to make sure we’re squeaky clean.”
HART also needs to consult with rail’s partners at the Federal Transit Administration to make sure the move doesn’t violate the project’s funding agreement, Nohara said.
Giving STG more work to do could address a major delay claim the firm has leveled against HART and the city, agency officials told the board. On Thursday, Nohara said that claim involved incomplete utility-relocation work around Ualena Street, and that it amounted to $40 million.
Under the extension, STG would help relocate the power lines hanging between Middle and Puuhale streets to clear a path for that guideway, Moore said. Nan, Inc. has already started relocating utilities in that area. Moore cautioned that rail has faced problems in the past when multiple contractors work in the same place at the same time.
The Hawaii Construction Alliance, the Hawaii Building and Construction Trades Council and several other trade groups and unions supported the idea in their written testimony.
As the committee’s discussion ended, HART’s online meeting software abruptly crashed and officials weren’t able to get it working again. The agency’s general board meeting was suspended to a later date.
Costs Keep Climbing
The project’s costs continue to climb, based on HART’s latest risk analysis. There’s now a 65% chance that the construction costs alone will amount to $8.25 billion, it found.
It’s also more than HART’s stated construction budget of $8.16 billion. “This number creeped up on us,” Nohara said at Thursday’s meeting.
Those construction costs don’t include the added hundreds of millions of dollars in financing, which is what brings the overall project cost to more than $9 billion.
The biggest risk HART now faces is the price of the remaining properties that the city must acquire to build rail, according to the latest risk report.
That includes properties owned by the Howard Hughes Corporation. On Thursday, HART officials said there’s about a $200 million difference between the city and the major Kakaako landowner on the value of the rail properties. Previously, a report from the contractor overseeing rail for the FTA put that difference at $100 million.
HART expects the matter will eventually go to court.
“It’s a very complicated case because there are so many parcels involved,” said Dylan Jones, HART’s director of real property acquisitions and relocations.
On Thursday, the board was supposed to vote on a $10 million amendment to provide HART with more legal help to face Howard Hughes, plus the owners of 25 parcels that the city still needs access to for rail.
Some of those parcels are crucial to keep utility relocation moving in town. Based on HART’s schedule, that work should be about a third complete by now. A presentation on Thursday showed it at about 3% or 4% complete, instead.
The board never got to vote on that change, however, because the meeting software crashed.
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