Local rail officials disclosed Thursday that they’ve vastly underestimated the cost to relocate utilities along the transit line’s last 4 miles into town — and that’s led them to raise the transit project’s price tag for the first time in more than three years.

Efforts to clear the maze of utility lines that weave from Middle Street to Ala Moana Center will require an additional $135 million to $235 million, according to the Honolulu Authority for Rapid Transportation.

That’s on top of a $400 million contract signed in 2018 to get that work done.

Rail officials say they aim to stay closer to the $135 million end by hiring a second contractor, which would help the existing contractor, Nan Inc., complete the relocation work more swiftly.

Contingency dollars freed up from the expiring guideway and station contracts on the west side should cover most if not all of those expenses, HART Executive Director Andrew Robbins said.

Still, the result is that for the first time since 2016 HART has raised rail’s overall construction cost from $8.165 billion to $8.21 billion.

HART Rail Guideway columns near Eliot Street and Daniel Inouye International Airport.
Honolulu’s rail guideway takes shape with new columns erected near the airport. Cory Lum/Civil Beat

That estimate does not include rail’s financing costs, which are what put the final price tag above $9 billion.

HART had previously touted keeping its budget in check as a key accomplishment.

To be sure, the $45 million increase is relatively small for the multibillion-dollar megaproject. But it comes amid rail’s uncertain financial future thanks to the COVID-19 pandemic and risk analyses that show project costs steadily creeping even higher.

“We need to be concerned. We need to really watch this,” said retired construction executive Glenn Nohara, who chairs the HART board’s Project Oversight Committee.

HART’s latest risk analysis, for April, forecasts a 65% chance that the final construction costs will come in at $8.29 billion, according to Paul Johnson, the agency’s risk management director.

That’s up from nearly $8.25 billion just a month ago.

It’s also just shy of the $8.3 billion budget in HART’s federally approved recovery plan. The Federal Transit Administration demanded HART use that amount because it determined the $8.165 million estimate was too low.

Nonetheless, HART Executive Director Andrew Robbins expressed confidence Thursday that the agency was effectively managing costs.

The new utility-relocation cost estimates may be large but they’re fairly conservative, he said.

Taking A Closer Look

Nohara and several other committee members now plan to investigate more closely how the cost estimates for that utility relocation were so far off.

A presentation delivered to the committee Thursday mentioned several, expensive culprits: a $75 million difference in water removal and jet-grouting, a $40 million difference in time and materials, a $25 million difference in managing traffic during the work and a $20 million difference in burying high-voltage power lines underground, among other problems.

The so-called City Center Utility Relocation contract, which rail staff often calls “CCUR,” was devised to keep rail work going as HART and the city have struggled for years to award the last major construction contract.

Most of the plans and designs for those relocations hadn’t been done when CCUR was awarded, however.

Dillingham Boulevard looking towards Costco near Honolulu Community College. Kapalama area.
Dillingham Boulevard near Honolulu Community College. Relocating the maze of utilities above and below the road is proving even more expensive than rail officials previously thought. Cory Lum/Civil Beat

HART structured the utility contract so that the work could be done piecemeal, when ready, for up to $400 million. Nan got the contract in May 2018.

Later that year, however, HART realized “we weren’t making progress fast enough,” Robbins said, with most of the work limited to night hours. Crews have been scrambling to catch up ever since. They’re still several months behind.

In March, Nan crews got the permits they needed to work around the clock along Dillingham Boulevard. They’ve looked to take advantage of light traffic during the pandemic shutdown, with travel reduced to one lane in each direction between Middle and Mokauea streets.

Nohara said Thursday that it’s not clear yet when the group studying utility costs will report back to the rest of the board.

In the meantime, the approvals process for the utility work needs to be expedited, Nohara said. There needs to be a way for all the different utilities to approve the work more quickly.

The move, he said, could help keep costs in check and rail on schedule. “Get all the parties together — that’ll go a long way,” Nohara said.

Robbins, meanwhile, said that the risk of more cost increases will go down as more of the actual work gets completed.

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