Each of the new bids opened Tuesday to build three West Oahu rail stations came in above estimates, indicating that transit officials have yet to pin down the true picture pertaining to how much the island’s elevated rail system will cost.
Five companies bid on the work to build stations at Leeward Community College, Waipahu and West Loch. The lowest bid, from Hawaiian Dredging Construction Co., was $78.9 million. The most expensive was submitted by Ralph S. Inouye Co., $117.5 million.
Meanwhile, the city had estimated those stations would cost between $60 million and $75 million to build. That range, unlike rail budget estimates from previous years, took into account Hawaii’s current competitive construction market.
The bids were the first to be unsealed since officials canceled an earlier group of bids for west-side station work that came in vastly over budget.
After the latest bids were opened Tuesday, rail’s top executive said that the lowest offering, from Hawaiian Dredging, would keep the project on pace with its current budget deficit range estimate. Rail currently faces as much as a $910 million shortfall.
COMING UP
>> Wednesday: The Senate Ways and Means Committee will hold a hearing on a measure to extend the rail tax at 9 a.m. Wednesday at the state Capitol. It will be broadcast on ‘Olelo Channel 49.
>> April: Bids for the next three westside stations are slated to go out.
>> August: Bids for the final three stations for that westside group will go out. |
However, it’s not guaranteed yet that rail officials will be able to select Hawaiian Dredging’s bid — they’ll first have to scrutinize the submissions and then announce which company gets the award sometime in the coming weeks.
The highest bid, from Ralph S. Inouye Co., would actually increase the rail deficit, Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas said.
The three stations represent only a sliver of the construction that remains to go out to bid. Rail officials say that 40 percent of the project remains to be awarded. Officials are now scrambling in hopes of getting all of those bid requests out by the end of the year to keep the project’s already ballooning costs from expanding even further.
"Time is money, and here it’s more expensive in Hawaii than anywhere else," Grabauskas said Tuesday, after the latest bids were unsealed. "It’s showing us the volatility of this market. … (The latest bid range) just reinforces the fact that we have to get this out as quickly as we can."
Despite all of the new bids coming in above estimates, Grabauskas expressed some optimism that HART’s early efforts to address the skyrocketing costs were helping. Hawaiian Dredging’s low bid would keep the project on course for a giant, looming deficit — but it also would at least offer a better price to build those stations than the original bids did from August, according to Grabauskas.
Last year the Leeward Community College, Waipahu and West Loch stations were part of a larger, nine-station contract package. Each of the three bids to build those nine stations were more than $100 million above what HART had budgeted, with the lowest bid at $294 million. HART then managed to cancel those bids and repackage the nine stations into smaller groups in hopes of curbing some costs.
The bids opened Tuesday were for the first of those new, smaller groups. Grabauskas and other rail leaders have been managing expectations on this first group for the past several months or so, saying that they expect to see more effective cost savings when they open the bids for the rest of the west-side stations.
Bids for the next three westside stations are slated to go out in April. Bids for the final three stations for that westside group will go out in August.
Neither the city nor HART has released estimates on how much they think those subsequent groups will cost.
Two weeks ago Honolulu Mayor Kirk Caldwell said that disclosing the city’s internal cost estimates for rail’s remaining contracts now would tarnish the bidding process — even as state officials have pressed for more financial details to help them decide whether to extend the rail tax.
Rail officials had previously estimated that the remaining construction would cost more than $1.3 billion, according to 2012 budget figures.
Now they’re bracing for the actual costs to complete that work to be much higher — although they say they’re repackaging the contracts in hopes that the bids don’t come in as dramatically over budget as they did originally for the first nine stations.
This week’s activity and focus on rail now shifts from Ali‘i Place, where HART’s downtown offices are located, to the state Capitol building about a block away. The Senate Ways and Means Committee will hold a hearing on several bills Wednesday, including a measure that would extend the 0.5 percent general excise surcharge funding rail for an additional 25 years.
If the Senate Ways and Means members pass the measure, it would need to clear a Senate floor vote before moving to the House for consideration.
