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The contractor overseeing Honolulu rail for the federal government believes the new, local cost projections released this week showing an $832 million price increase are too low and likely to climb, according to project board members.
The new numbers boost the estimated cost of the troubled project to $9.9 billion.
During private meetings held this week, staff with Hill International said the draft numbers given by the Honolulu Authority for Rapid Transportation were “too optimistic,” according to HART board member Terrence Lee.
Hill monitors rail progress for the Federal Transit Administration as the agency’s so-called “project management oversight contractor.”
“I don’t want us to be overly optimistic,” Lee told fellow board members during a series of virtual committee meetings Thursday.
“We keep making the same mistake over and over, and it really hurts the credibility of the organization and the project itself,” Lee said.
Nathaniel “Nate” Meddings, HART’s director for project controls, stressed to board members that the numbers given so far are just a draft and not a final product. So far, the agency’s cost increase includes some $200 million more to build rail’s final 4 miles and eight stations, raising the total cost for that work to $1.78 billion.
HART board Vice Chairman Terrence Lee cautioned against releasing figures that are too optimistic even as rail costs continue to increase. “We keep making the same mistake over and over,” he said Thursday.
Cory Lum/Civil Beat
However, one of the construction companies bidding for that work, Tutor Perini Corp., told investors this summer that its team submitted a proposal of more than $2 billion. The official bids haven’t been disclosed yet because the contract procurement is still active.
HART’s $832 million figure also included the costs of what the agency now believes will be an additional four-month delay to finish the elevated transit line.
Recently, the agency was trying to have the system ready for service by June 2026, Meddings said Thursday. Now, the recent utility-relocation woes along Dillingham Boulevard have pushed that back to October 2026 at the earliest, he added.
That new timeline does not include any “float,” or buffer in the schedule in case the project encounters even more challenges.
Glenn Nohara, another HART board member, said that Hill believes HART’s new projections are “too aggressive.”
Meddings said the local agency would continue to refine them in the weeks ahead. “We want to rebuild the trust” with its updated cost estimate, he said.
The Best Path Forward?
HART board members met both in public and in private Thursday to address the various problems driving up cost and delaying the overall schedule, as well as what to do about them.
The megaproject remains tangled in a prickly, time-sensitive dispute between city and HART leaders over the most sensible path forward, now that construction bids have come in over budget and utility relocation is in disarray.
Andrew Robbins, HART’s embattled executive director, argued again Thursday that the agency he leads should press on with the latest contract procurement to Ala Moana Center even though his counterparts at the city backed out of that effort last month.
Robbins said there’s still valuable intelligence to collect from those private firms over the next few weeks beyond just their price proposals. HART and the city could benefit from that intelligence for the next time they put the work out to bid, but they’ll lose access to it once the procurement ends, Robbins added.
Furthermore, the city prevented those talks from starting in July as it looked to withdraw from the procurement, Robbins said Thursday. That move caused the project to lose valuable time, he said.
The future rail line’s elevated pathway winds near the airport. City leaders and HART administrative leaders disagree on the best way forward now that the project has run into more problems.
Cory Lum/Civil Beat
Nonetheless, Robbins has faced enormous pressure from city leaders to shut that procurement down amid fears that the FTA will start revoking the project’s remaining federal funding.
The federal agency continues to withhold rail’s remaining $744 million, including $250 million that’s poised to lapse at the end of the year.
Lee said that officials in Washington, D.C., have told him the FTA considers Honolulu rail to be the most “challenged and troubled project that they’re dealing with.”
“It’s very much on their radar, so we have to be very judicious and careful how we proceed forward,” Lee told his colleagues Thursday. “We have to get our house in order. We have to present a unified front” between HART and the city.
Honolulu Mayor Kirk Caldwell spent more than an hour at Wednesday’s City Council budget meeting testifying that HART needs to stop the procurement. His extended testimony resembled a filibuster.
Caldwell cabinet member Wes Frysztacki, who as the city’s Transportation Services director sits on the HART board, said Thursday that “we don’t have months; we don’t have weeks. We have days” to present the FTA with some sort of acceptable plan B.
“And we probably have fewer days than any of us realize,” Frysztacki added.
The HART board’s Government Affairs/Audit/Legal Matters committee discussed the issue in executive session Thursday. Its members decided to put in a recommendation that Robbins shut down the procurement before the full board at a future meeting.
Robbins said he would adhere to whatever the full board decides.
It remains uncertain whether Robbins will continue to lead the project once his contract expires at the end of the year. The board’s Human Resources Committee discussed Robbins’ job performance, as well as “HART leadership and transition,” for about 90 minutes in closed session Thursday.
Those discussions are slated to continue at upcoming meetings.
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