The Honolulu Authority for Rapid Transportation will not address the winning rail car bidder’s fiscal and structural troubles until after the appeals process is completed in the middle of the month.
Finmeccanica, the parent conglomerate of the winning rail car bidder, said last week it plans to restructure or sell AnsaldoBreda, which would design and build the rail cars for Honolulu’s 20-mile, $5.3 billion system. AnsaldoBreda and Ansaldo STS, both under Finmeccanica, make up Ansaldo Honolulu, the winning bidder.
Some of the rail board members had questions Thursday regarding the bidder’s ability to fulfill the contract the city intends to award. But Deputy Corporation Counsel Gary Takeuchi said the appeals process at the state Department of Commerce and Consumer Affairs won’t be completed until Aug. 15 at the latest.
Sumitomo Corp. of America, a losing bidder, has filed an appeal with the state in an attempt to force the city to reconsider the contract award. A senior hearings officer has until Aug. 15 to make a decision.
"My general recommendation would be to wait until the decision is made, which should not be very long from now," Takeuchi said.
The hearings officer might decide to reopen bidding for the contract, which would render moot any discussion on Ansaldo Honolulu. Also, the law restrains the board from taking any action until the procurement process is complete. No contract has been signed because of the appeals.
HART Board Chairwoman Carrie Okinaga said the board meets every month, so there would be ample opportunity to discuss the issue.
AnsaldoBreda has had difficult relations with its customers and trouble meeting its contracts, said Giuseppe Orsi, chief executive officer of Finmeccanica, which is partially owned by the Italian government.
Fitch Ratings dropped Finmeccanica’s rating Tuesday, according to a Reuters report. The Economist magazine reported the company barely made a profit in the first half of the year and that "shareholders are spitting fire."
"Its biggest problem is AnsaldoBreda … which has lost more than 1 billion euros ($1.4 billion)," the Economist report states.
