Construction of Honolulu’s rail transit system is on track to cost many millions of dollars more than originally thought.
Rail officials this week opened the three bids they received to build the $5.26 billion project’s first nine stations. All three bids exceeded by well more than $100 million what they had originally budgeted for the work. The least expensive of the bids was still about 60 percent greater than what they had expected.
Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas blamed the disparity on the recent legal challenges that halted construction for more than a year.
"The time we lost because of those lawsuits … is what put us in this bid environment, and the market forces are what they are," Grabauskas told HART’s board on Thursday.
The agency, which oversees rail’s completion, had budgeted at least $150 million to build the first nine stations with a $34 million contingency, totaling $184 million, according to rail officials.
Three companies bid for the contract to build those stations along the line’s first 10 miles, running from a region east of Kapolei to Aloha Stadium, those officials reported Thursday.
Nan, Inc. bid $294.5 million, Nordic PCL bid $312.3 million, and Hensel Phelps bid $320 million.
Even though Nan bid the lowest, it won’t necessarily be awarded the contract.
The bids are the first to land for what officials had projected would be some $1.2 billion in construction work to be contracted this year — but now they’re bracing for the actual costs to be considerably more expensive. The work to build the second 10-mile leg of the project, ending at Ala Moana Center, was budgeted to cost at least $750 million, Grabauskas said.
The final bids for that larger chunk of work will be opened in November, he added.
At that point, rail officials say, they’ll have a clear idea over whether the elevated rail system, slated to open its first leg in 2017, will actually come in on budget.
The project has $563 million in contingency remaining, and officials budgeted for a balance of more than $190 million when the work is finished – a sort of "secondary contingency" that could also go toward the spiking construction costs, Grabauskas said.
Whether that will be enough to offset the rapidly growing construction costs remains to be seen.