Honolulu rail officials this week awarded a nearly half-billion dollar contract that they hope will finally overcome one of the project’s biggest hurdles: relocating the maze of utility lines that run above and below Dillingham Boulevard.

The $496 million contract went to Nan Inc., according to city records. It will be the second try for the local construction firm. In 2018, the Honolulu Authority for Rapid Transportation under prior leadership awarded a separate contract to Nan that essentially put them on call for utility relocation past Middle Street for up to $400 million.

However, as HART failed to get the required city approvals and progress stalled, Nan wound up completing about 8% of that work. Still, the Kalihi firm was paid about $100 million before that original contract was canceled.

Nan’s new contract will cover a nearly 1.5-mile stretch from the corner of Kamehameha Highway and Laumaka Street, near the Oahu Community Correctional Center, to Dillingham and Kaaahi Street in Iwilei.

‘A Huge Accomplishment’

A separate contract, awarded in January to Frank V. Coluccio Construction Co., covers the utility relocation through downtown Honolulu and Kakaako, as far as Cooke Street. HART awarded that contract for nearly $218 million, putting the total for all the utility work past Middle Street at more than $700 million.

That total doesn’t include the $100 million paid out under Nan’s original, canceled contract.

Cost estimates for relocating the complex tangle of utilities in Honolulu’s crowded urban corridor past Middle Street have skyrocketed over the years. In 2012, city officials estimated in their funding agreement with the federal government that it would cost as little $63 million to do that work.

Still, HART’s latest leadership described the contract award on Thursday as a huge accomplishment to help advance the beleaguered transit project.

“This represents the biggest win since I’ve been here at HART,” Project Director Nathaniel Meddings told the HART board during its meeting. “This is good news, this is lower than what we anticipated.”

The Nan award was 3% cheaper than what HART expected under its latest budget, according to HART Executive Director Lori Kahikina.

Board member Anthony Aalto said he was “pleasantly surprised” that the bid came in below budget amid the recent inflation that has affected prices around the globe. Inflation’s impact on rail prices “has been this cloud that’s been hanging over our heads,” he added.

HART members cautioned that it’s too early to predict whether they would get similar, favorable bid prices in the future.

“Awarding the contract … is a huge accomplishment for HART as it is the final large contract before we get to the actual guideway and station construction through this corridor,” Kahikina added in a statement released after the board meeting.

Mulling The Mauka Shift

Much of HART’s new plan to get that utility work done relies on what the agency calls the “mauka shift.” Under that strategy, crews would build the concrete and steel columns used to support the guideway from Waiakamilo Road to Kaaahi Street about 45 feet more inland than what’s been planned.

That way, HART can avoid relocating the major power lines that run along Dillingham’s coastal end. Keeping those lines above ground would free up space below ground.

Kahikina and her predecessor, Andrew Robbins, have both previously said that HART needs to determine whether it needs a supplemental environmental impact statement in order to execute the mauka shift. (Mauka means “inland” in Hawaiian.) That step could take several years to complete.

In a statement Thursday, Kahikina said the utility relocation work is already covered under rail’s final EIS and “will occur regardless of whether the guideway shifts mauka or not.” Officials said work is slated to start in early 2023 and last three years.

But it’s still not clear how Nan’s utility work in that area would be impacted if it turns out the mauka shift needs several years to complete the supplemental EIS.

The award is still subject to a 10-day window in which other bidders could protest, according to HART. That period ends next week.