Oahu’s cash-strapped rail project faces a momentous week ahead, with key findings and decisions that could lend a clearer picture of where the public transit system is heading.
On Tuesday, Honolulu Authority for Rapid Transportation officials will open the project’s first new bids for construction work since they canceled the last batch that they received, when all of those bids came in vastly over budget.
Rail officials are already attempting to manage expectations on this first new batch of bids. HART Executive Director Dan Grabauskas has said in recent months that the agency expects to see more effective cost reductions in the bids that come back later this year for additional rail work.
Still, the new bids to be opened this week are a bellwether to see if HART’s efforts to contain costs are at all working, now that the project faces up to a $910 million budget shortfall.
The issue with bid prices goes back to August, when rail leaders opened three bids to build nine West Oahu stations — and all of them came in at least $100 million above the approximately $184 million price tag that officials were expecting.
HART managed to cancel those bids despite an initial protest from Nan Inc. — the lowest bidder, which already has rail contract work. Rail officials then divided the work into groups of three stations, hoping that the move would open the station work to more bidders and thus help curb skyrocketing construction costs.
Last fall’s sticker shock led Grabauskas and other rail leaders to start expressing real uncertainty over whether they would deliver the project on budget, after having often cited "on time and on budget" as their goal.
Now that the project faces a massive budget gap, HART hopes to address the problem in part by repackaging the rail work that remains. However, it’s unclear how much total savings they expect to see through those measures.
The bids to be opened on Tuesday will be for the first of those smaller station groups, at Leeward Community College, Waipahu and West Loch, according to HART. City officials estimate that the contract will cost between $60 million and $75 million.
Honolulu Mayor Kirk Caldwell has acknowledged that the city had its own internal cost projections for all of the remaining rail contracts that need to go out, but that city officials can’t share those cost ranges because it would tarnish the bidding process. The estimate for this first new station group is available because the contract has been published, Caldwell spokesman Jesse Broder Van Dyke said in an email last week.
On Wednesday, after those new station bid prices are revealed, state senators will further consider a controversial bill in the debate over how to address the rail project’s shortfall.
In its latest version, Senate Bill 19 would extend the 0.5 percent Oahu general excise tax surcharge that’s funding rail for an additional 25 years past its sunset. Under the measure, the rail tax would now be collected through 2047 to fund extensions to the University of Hawaii-Manoa campus and Kapolei.
Members of the Senate’s committees on Transportation and Public Safety, Intergovernmental and Military Affairs approved the measure earlier this month and added that 25-year limit instead of letting the surcharge go on in perpetuity. They also added language to divert half of the state’s 10 percent administrative take on the rail tax to fund what’s known as "transit-oriented development" efforts.
Currently, all of the state’s take goes to its general fund.
On Wednesday, the Senate’s Ways and Means committee will take up the bill. If those members pass the measure, it would need to clear a Senate floor vote before moving to the House for consideration.
Caldwell and other transit officials have said they’ll need the tax extension passed in this legislative session in order to keep rail construction moving ahead. However, they add that they can’t share much more than they already have on cost projections despite the questions from state lawmakers who’ve been pressing for more details on rail finances during this session.
In a news conference Thursday, Gov. David Ige said he still hasn’t seen "anything that compels me that we need to authorize it this year."
It’s still "premature" to say whether he would sign an extension into law, Ige told reporters.
"I know that there’s lots of questions that the Legislature is seeking to get answers to, as well as I."