$4.4M added to costs of 2 rail contracts

While the public braces for the painful budget deficits ahead as rail moves forward, board members overseeing the Oahu project on Thursday approved $4.4 million in added costs to existing contracts.

More than half of those new costs, about $2.5 million, will go toward building a test track with automated controls at the rail operations center that’s taking shape next to Leeward Community College.

It’s the latest in a string of change orders to redesign the center after the contract to build it had already been awarded to the joint venture Kiewit Koba­ya­shi. In May the board approved a separate $22.5 million for the redesign.

The board’s latest cost approvals also come as rail officials grapple with what could amount to a $900 million budget shortfall and as rail leaders — particularly Hono­lulu Mayor Kirk Caldwell — work to sway state legislators to extend the tax surcharge that’s funding most of the project.

On Thursday, Hono­lulu Authority for Rapid Transportation board members repeatedly noted the effort to extend the 0.5 percent general excise tax surcharge — and their concerns of how the public and lawmakers might react to the latest cost approvals in light of the effort.

Rail officials, meanwhile, repeated the argument they’ve made over the past year that making the center more automated will make it safer and save about $2.5 million a year in operations. They also said the change order Thursday would be the last "major" change order for the center’s redesign.

However, gradually rolling out those change orders over many months — and presenting the latest change order right as local transit leaders are pushing state leaders for the tax extension — clearly irked some board members.

HART board member William "Buzz" Hong compared the cost increases to a used-car dealer using bait-and-switch tactics and not revealing the full costs until after the sale.

"The vendor should have come up front" and told HART what needed to be part of the operation center’s system, he said. "Now we have additional costs."

HART Executive Director Dan Grabauskas gave the same explanation he’s offered in previous board talks on the redesign. The rail leaders who preceded him took a calculated risk in proceeding with the center’s design before they could consult with the rail system’s designer and operator, Ansaldo Hono­lulu JV, because of a legal challenge from a competitor for that bid, Bombardier Inc., he said.

Those leaders didn’t know how long that legal challenge would persist, so they opted to move forward without Ansaldo’s input, Grabauskas said.

The remaining costs brought forward Thursday, nearly $2 million, were slated to deliver four new modular buildings to Leeward Community College so the school can relocate some of its facilities and heavy equipment for trade classes during construction.

Originally, rail officials had planned to move existing modular buildings on the campus, but on Thursday they said they found those building to be too old to move.

George Atta, city planning and permitting director and a nonvoting HART board member, said he is worried other public agencies might view HART as a "money source" during rail’s construction to complete improvements they would have needed to do anyway.

Hong, who has a lengthy background in the construction trade, questioned the $1.9 million price tag for the new modular buildings.

"The numbers don’t add up," he said.

The board approved the request on the condition that HART officials first check whether local building firms could put together a cheaper, alternative offer.

The latest costs will be covered by existing contingency dollars, and several top rail officials, including board member Don Hor­ner, described the changes a good way to "build rail better." However, these latest cost increases also come as those same officials stress that they need to cut future costs to help address the project’s looming, massive budget shortfall.