Despite strong opposition from Honolulu’s mayor and other top city officials, rail’s executive director says he’ll still try to salvage a deal out of the latest effort to award the project’s last, major construction contract.
“Why throw in the towel now without any discussion? It doesn’t make any sense,” rail chief Andrew Robbins said Thursday, making his case to Honolulu Authority for Rapid Transportation board members during their special briefing.
The procurement to build the final 4 miles of elevated path and eight stations into town, plus a transit center at Pearl Highlands, hasn’t played out yet, Robbins said, even if the city withdrew its participation in the process.
The city had agreed to pursue a 30-year operations agreement from the winning bidder alongside the construction. It pulled the plug on that effort Sept. 25.
Mayor Kirk Caldwell and city leaders disagree with Robbins. They argue the city’s withdrawal kills any subsequent pursuit of a so-called public-private partnership because HART approved that pursuit on the condition that they be involved. Robbins should stop immediately, they argued in recent written testimony to the HART board.
Deputies with the city’s corporation counsel, which represent both the city and HART, have yet to offer an opinion. The fact that city lawyers haven’t offered anything in writing “is kind of disturbing,” HART board member Glenn Nohara said Thursday.
Robbins said that the rail agency would also seek legal advice from an outside firm, Ashurst, which it hired to help on P3.
In the meantime, Robbins, the embattled rail executive, pledged to continue with the procurement process, calling it the closest they’ve gotten to awarding the transit project’s most daunting contract.
He told board members Thursday that he hopes to hold three rounds of talks over the next four to six weeks with the final two private teams that bid on the partnership to finish rail and run the system.
Those talks would take place behind closed doors because the procurement is still active. They could at least yield valuable information as to why the bid prices are so high and perhaps lead to a breakthrough for an award, Robbins said.
The two primary contractors that have thus far built rail as far as the airport — Kiewit Infrastructure West and Shimmick/Traylor/Granite — each won their contracts through a “best and final offer” process, where HART negotiated a better price than the initial proposals, according to Robbins.
It’s worth trying the same thing with the latest bidders, Robbins said.
“Why is the city punting, or canceling the game now?” he asked in an interview after the briefing. “We got all this value in these proposals. We’re not going to have a single discussion, learn more about it?”
“I would like to get more info and bring it to Mayor Caldwell but he made it clear that he’s shut the door,” he added.
Nonetheless, it’s not clear yet what the city’s chief procurement officer for the contract, Manuel Valbuena, along with the city’s team of evaluators saw in the proposals to cause them to back away from the table as soon as they possibly could. No official numbers or terms have been made public because the procurement is still active.
A construction company that was part of one of the private teams bidding, Tutor Perini Corporation, told investors this summer that it had submitted a more than $2 billion bid, which would have been more than $600 million over what HART had budgeted for construction.
“The bids were so far out of reach that there was no way to make it work,” Caldwell told the board members Thursday in an approximately hour-long retort to Robbins.
Caldwell said he hasn’t seen the P3 proposals personally but the city team evaluating the proposals told him the prices were “so far out of the ballpark that there was no potential for negotiation.”
Thursday’s briefing more closely resembled a courtroom showdown, with Robbins and Caldwell delivering impassioned and occasionally tense arguments via online meeting software for and against continuing the P3 procurement process.
The P3 process that Robbins has spearheaded has already seen a year’s worth of delays, and Caldwell said the rail agency doesn’t deserve any more chances. He called on HART to “dust off” its “plan B” alternative to award the construction under a standard contract to design and build the rest of rail.
Robbins, meanwhile, said that starting the procurement over a fourth time would delay that process by at least a year. It’s not clear yet how it would impact the project’s overall schedule.
Caldwell countered that those delays are inevitable anyway now that the project’s utility relocation on Dillingham Boulevard has completely stalled amid its design snafus. Costs to build rail to Ala Moana are now certain to increase one way or another, so HART and the city might as well start the procurement process over, the mayor said.
If they start the procurement over it will have to go through the same confidential process that the mayor has been complaining about this week, Robbins said.
The HART board has not participated in or overseen the P3 procurement process. That’s fallen to Robbins, as the rail agency’s chief procurement officer and Valbuena, who was his counterpart at the city before those officials bowed out.
The volunteer board plans to vote later on whether to support the continued P3 endeavor, Chairman Toby Martyn said after the briefing.
After Thursday’s meeting Robbins said “the board has a voice” and that he’s open to guidance, but he declined to say whether he would follow their advice.
“We have the experts on the HART side” for rail construction and P3 procurement, he said. The rail agency’s committee recommended they move forward with the proposals.
“We’re not the ones that left,” he said. “We can’t quit.”
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