A major contractor still working on the Honolulu rail project has gone back to court to try to collect $320 million it says the city owes in compensation for delays and other unexpected costs associated with construction of the project.

Hitachi Rail Honolulu JV on Monday filed a new version of its 2024 lawsuit against the Honolulu Authority for Rapid Transportation, alleging the city’s “gross mismanagement of the Skyline rail project caused countless delays and other errors” that cost Hitachi hundreds of millions of dollars.

The new suit states that when they were confronted with Hitachi’s initial claim for $320 million plus interest, HART staff offered to pay Hitachi about $8 million in damages. HART also reserved the right to seek about $22.5 million in liquidated damages from Hitachi for delays.

Hitachi filed a similar lawsuit late last year, but that suit was dismissed in August after a Honolulu Circuit Court judge ruled Hitachi had failed to complete all of the dispute resolution steps required under its contract with HART.

HART Executive Director Lori Kahikina declined a request for an interview Tuesday, but HART staff said in a written statement that the latest Hitachi lawsuit “contains allegations of ‘gross mismanagement’ that HART categorically denies.”

The HART statement noted the rail authority issued a Contracting Officer’s Decision on Nov. 14 that rejected most of Hitachi’s claims, which totaled more than $323 million. That decision alleges Hitachi blamed HART for delays that were Hitachi’s fault.

Kahikina, who is also the HART contracting officer, alleged in that decision it appears Hitachi “manipulated its schedules to mask its own lack of performance and to improperly place the blame on HART.”

The HART decision also alleges Hitachi “failed and refused to provide HART with key documentation to support its claimed costs. This includes Project cost accounting records to support Hitachi’s labor and other costs.”

HART will file a reply in court to Hitachi’s latest lawsuit as well as a counterclaim against Hitachi within the next several weeks, according to the HART statement.

Hitachi is one of the most important Honolulu rail contractors, and is responsible for installing, operating and maintaining the control and power systems and other functions for the 18.9-mile Skyline rail line.

The city rail authority “remains committed to a fair and productive partnership with Hitachi, and looks forward to resolving these issues and continuing joint efforts” to complete the Skyline project, the HART statement said.

Hitachi’s Suit Rated A Huge Risk To Skyline

Hill International Inc., a consultant hired by the Federal Transit Administration to monitor the Honolulu project, has rated the Hitachi claim as one of the top risks for the $10 billion Skyline project.

HART Director of Project Controls Corey Ellis told rail authority board members in June the financial risk posed by the Hitachi claim is already accounted for in HART’s project budget, but HART has not said publicly how much it has earmarked to settle the claim.

The lawsuit filed this week by Hitachi alleges HART owes the rail contractor $320 million mostly because of construction and other delays.

“Whether through bad faith or incompetence, the HART Defendants have caused (Hitachi) to waste significant time and money.”

Hitachi lawsuit

HART’s contract with Hitachi required the company to mobilize crews to perform tasks on the rail project, but a long series of delays in construction of the guideway, stations and track prevented the crews from starting work as scheduled, according to the lawsuit.

Lawyers for Hitachi blamed many of the delays on HART’s decision early in the project to hire a variety of contractors to work on rail without properly managing those contractors.

“Whether through bad faith or incompetence, the HART Defendants have caused (Hitachi) to waste significant time and money,” according to the lawsuit. “This is not good faith action.”

The rail line was originally supposed to be open to the public by 2020, but the latest estimates are the system from East Kapolei to Kakaʻako probably won’t be open for service until mid-2031.

Hitachi’s predecessor, Ansaldo Honolulu JV, settled similar delay claims with the city in 2019 for $160 million, which covered more than 2,000 days of rail project delays.

Hitachi bought out Ansaldo, but lawyers for Hitachi said in the new lawsuit the city has still not paid out “a significant part” of the $160 million it owes under the previous settlement.

Here’s the new lawsuit: