The high-stakes dispute between the Honolulu rail authority and one of its most important contractors escalated again this week as the Honolulu Authority for Rapid Transportation filed a new claim alleging Hitachi Rail Honolulu JV made false statements in its multimillion-dollar lawsuit against HART.

The HART counterclaim accuses Hitachi of breach of contract and violations of Hawaiʻi’s False Claims Act, which allows for triple damages when claims against a county are based on “false or fraudulent” demands for payment.

Hitachi sued HART last month seeking more than $320 million in compensation for construction delays on the rail project, which is currently running more than a decade behind schedule. The Hitachi lawsuit blames project delays on mismanagement by HART.

HART alleges in its counterclaim filed Wednesday that it is entitled to monetary damages for delays and errors caused by Hitachi.

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 $10 billion, 18.9-mile Skyline system.

David Minkin, a lawyer who is representing Hitachi in its lawsuit against HART, did not respond to a request for comment Thursday.

Hitachi has been pressing HART to resolve its claims since early 2023 and sued the city over rail project delays late last year. But that lawsuit was dismissed in August after a Honolulu Circuit Court judge ruled Hitachi failed to complete all of the dispute resolution steps required under its contract with HART.

Hitachi then filed a new version of its 2024 lawsuit against HART last month, 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.

HART replied last month that it “categorically denies” the claim of gross mismanagement.

‘False And Misleading’ Claims

The rail authority is alleging in its counterclaim that Hitachi failed to provide an accurate baseline schedule and produced updated schedules that did not accurately represent its actual work.

Completion dates were entered on Hitachi’s schedule documentation for activities that were not finished, which the city alleges was a way of “masking HRH’s own delays in an effort to blame HART.”

HART alleges Hitachi went on to make hundreds of changes in schedule-related documents each month, and “the sheer volume of changes rendered the original already flawed baseline schedule essentially meaningless,” according to the city filing this week.

As for Hitachi’s claim for damages, HART contends Hitachi’s delay claim “alleges that virtually every day of delay in the project through segments one and two — totaling approximately 1,800 days — were caused by HART when in fact, HRH knew that this was not true,” according to HART’s filing this week.

Instead, HART is alleging either Hitachi was responsible for most of the delays, or Hitachi was not entitled to compensation for the setbacks. HART is also alleging Hitachi knew “the schedules it submitted to HART in support of (its) claim were false and misleading.”

According to the lawsuit Hitachi filed last month, HART staff at one point offered to pay Hitachi about $8 million in damages after Hitachi made its initial claim for $320 million plus interest. However, HART also reserved the right to seek about $22.5 million in damages for delays it blames on Hitachi, according to the Hitachi suit.

Hill International Inc., a consultant hired by the Federal Transit Administration to monitor the Honolulu project, rates the Hitachi claim as one of the top risks for the still-unfinished Skyline project.

HART Director of Project Controls Corey Ellis told rail authority board members in June that 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 earmarked to settle that claim.