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Monday, December 22, 2014         

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Assurances needed on rail


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While the city has chosen the company to build rail transit cars and operate and maintain the system, it has yet to sign the contract. If that company, Ansaldo Hono­lulu, withstands public questions and challenges from competing bidders, its past track record requires strong assurance that it will fulfill its obligations.

Ansaldo Honolulu, a joint venture of Italy’s AnsaldoBreda and Ansaldo STS, has been tapped to design and build 80 rail cars at a cost of $574 million as part of the

$5.5 billion rail construction project. The company’s contract also includes operating and maintaining the system for up to 10 years for as much as $823 million, for a total price tag of nearly $1.4 billion.

Troubling, though, is the bad experience of previous Ansaldo customers. Los Angeles transit officials have complained about AnsaldoBreda being a year and a half late in delivering 50 light-rail vehicles in January 2009, and the cars were overweight. Lorenzo Reffreger, AnsaldoBreda’s vice president of sales and marketing, attributes the problems to changes in product specifications due to management changes in the L.A. transit authority, which may be a plausible explanation. In Honolulu, the city transportation officials who directed the rail project during the Hannemann administration have been retained by Mayor Peter Carlisle, hopefully minimizing potential for that snafu.

Also, the mayor of a New York town where an AnsaldoBreda subcontractor was expected to bring jobs blames the Italian company for running three years behind schedule in rebuilding 27 subway cars of the Buffalo, N.Y., rail transit system because of disagreement on points to assure safe operation. AnsaldoBreda has since moved the construction work to a plant in another town. Reffreger and a transit system spokesman maintain that the timetable has not been delayed, the Buffalo News reports.

Breeding further doubt over the Ansaldo choice is the fact that Carlisle neglected to disclose the full amount of its contract in a news conference. Though he made a point of saying that the $574 million design-and-build contract came in under budget, he should have been more forthright in revealing the total Ansaldo contract, including operating and maintenance, at $1.4 billion. Full disclosure would not have left the lingering question, real or imagined, of hidden information.

City Budget Director Michael Hansen said the city “followed all procurement procedures as required by law and the contract was awarded accordingly.”

Germany-based Bombardier Transportation, which is the world’s No. 1 train supplier, and Sumitomo Corp. of America, a Japanese subsidiary, met with Honolulu officials in separate sessions this week to review the basis for AnsaldoBreda's having been chosen for the job. Bombardier’s bid was less than that of AnsaldoBreda while Sumitomo's bid was slightly more. They have until Monday to decide whether to file formal complaints.

All three companies are prominent in the rail vehicle construction industry, and the competition for the Honolulu contract appears to have been fierce. If complaints are filed by either or both of the two companies not chosen, the test will be whether the city properly followed the procurement process and, if not, how that may delay construction.

We want to believe Toru Hamayasu, rail transit general manager, when he says that “the city did its homework; we were aware of those concerns. (Ansaldo) would not have been allowed to continue through the procurement process if they were not deemed qualified.”

All rail contracts must prove sound to serve Oahu’s best interests. It would be a shame for the project to be derailed just as it is ready to get moving.






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