Local rail officials say they’ve all but scrapped their recent proposal to have the project’s current major construction contractor, who’s building the line as far as Middle Street, build several blocks farther into town.
The move would have expanded Shimmick Traylor Granite’s scope of work by as much as $100 million to erect an additional one-third mile of track into Kalihi. It aimed to keep rail construction moving amid the transit project’s latest delays, attributed to the COVID-19 pandemic.
“We’ve come to the conclusion … that it is unlikely that we can pursue this change order any further,” Honolulu Authority for Rapid Transportation Executive Director Andrew Robbins told the agency’s board during its meeting Thursday.
Robbins said the parties simply ran out of time.
HART, he said, needed to know by June 1 whether it would be STG or the project’s next major contractor who would build that portion of guideway ending past Puuhale Road.
The June deadline gives the firms vying for rail’s next major construction contract the time they need to finalize their bids, Robbins explained. HART looks to award that work as part of a larger public-private partnership. The winning bidder would also eventually run the transit system for the city during its first 30 years in service.
Robbins said that HART and STG couldn’t agree in time on how much it would cost to build the extra one-third mile of Kalihi track. HART officials last month put its price somewhere between $70 million and $100 million.
STG already has an $886 million contract to build four stations and about five miles of elevated track from Aloha Stadium to Middle Street.
Giving STG more to do was also floated as a potential fix for a major delay claim that the joint venture has looming against HART.
The claim involves still unfinished utility work near Ualena Street. It hasn’t been listed in official reports yet, but rail leaders said the cost could be around $40 million.
“Both us and the contractor would’ve liked to get this resolved” through the added work, Robbins said Thursday.
Previously, Nan Inc. did utility relocation work for rail in the area along Kamehameha Highway. The utility work near Ualena wasn’t part of that contract, rail officials said Thursday. Instead, it falls under STG’s contract scope, HART spokesman Bill Brennan said in an email.
The specifics of STG’s claim still aren’t clear, although Brennan said the matter involved Hawaiian Electric Co. and its approvals of STG’s plans for the utility work.
In a statement Thursday, HECO said it would be inaccurate for STG to blame the local utility for delays or cost overruns.
“STG chose to discard utility design work done by HART before STG was contracted, completely changing the design,” the HECO statement read. “The quality of their design work and drawings required numerous corrections and revisions by our engineers, all of which were turned around quickly on our end and well within contracted timeframes.”
Growing Concerns Over Partnership
HART has pushed back multiple times the award date for its public-private partnership, or “P3,” to finish rail. The agency says it was on track to meet its recent May deadline for that award when the pandemic hit.
Now, the award is slated for late August. Bids from as many as three finalists are due in July.
At Thursday’s meeting, HART board member Hoyt Zia expressed concerns that the economic free-fall caused by COVID-19 could upend the agency’s plans for a P3.
Zia wanted to know what Plan B was — just in case the effort falls through.
Last fall, the local rail agency scrapped plans for such a Plan B, or “off-ramp,” deeming it no longer necessary. “We’re well beyond it,” Robbins said in October.
On Thursday, Robbins told Zia that HART has a “mitigation strategy” ready in case the bids aren’t acceptable. State procurement law allows for that to try and reach a successful outcome, he said.
If the mitigation strategy doesn’t work then HART will have to start the procurement process over again, Robbins said.
Zia asked for more details beyond just the process, but Robbins said he couldn’t share specifics because it would interfere with the P3 procurement.
“There’s always a possibility that there won’t be a successful outcome,” Robbins said. He added that none of the finalists have dropped out and that HART considers that an encouraging sign.
Throughout the construction industry “projects are still going forward and loans are still being made,” he told Zia. “I do remain confident.”
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