Honolulu’s rail project officials saw lower-than-expected prices for the latest batch of stations to go out to bid, indicating that transit officials’ attempts to curb at least some of the painful cost increases are paying off.
Even so, the cost to build the first nine stations along the line is still on pace to exceed rail’s original budget estimates by about 35 to 45 percent, according to the project’s top executive. That’s slightly better than the 60 percent increase that rail faced last year to build those stations, before it canceled the original bids.
On Tuesday rail officials opened new bids from four companies vying to build the three westernmost stations along the line, at East Kapolei, the University of Hawaii-West Oahu and Hoopili.
They had estimated before the bids were unsealed that the work would cost between $65 million and $80 million. The lowest bid, from Nan Inc., came in well below that, at $56.1 million. The highest, from Hawaiian Dredging Construction Co., came in at $73.4 million.
Firms Hensel Phelps and Watts Constructors also submitted bids, at $67.2 million and $66.5 million, respectively.
"I think we’re pretty happy with the cluster of bids at the low end of the range," said Dan Grabauskas, executive director of the Honolulu Authority for Rapid Transportation, minutes after the bids were unsealed Tuesday. "Whatever we put out, and whatever the bidders saw, they saw the same thing."
In March 2014 each of the five bids opened, to build a separate group of three stations, came in above HART estimates — even after the agency took into account Hawaii’s competitive construction market. The lowest bid in that batch, from Hawaiian Dredging, proposed $78.9 million to build the stations at Leeward Community College, Waipahu and West Loch. HART had estimated that work would cost between $60 million and $75 million.
But even before those earlier bids were opened, HART officials repeatedly predicted that they would start to see more dramatic reductions in price starting with bids opened Tuesday.
That’s because starting with these latest bids, rail officials would have more time to make changes to the request for bids — to be clearer in what the work entailed while giving construction firms more time and flexibility to get it done, Grabauskas said.
Nonetheless, even with the gains seen Tuesday, the project still faces significant construction cost increases compared with what had been originally budgeted several years ago.
Rail still faces as much as a $910 million budget gap — and it’s still not clear how officials will make up the difference.
Gov. David Ige has yet to indicate whether he intends to sign into law a bill extending the rail tax for five years.
The bids are the latest to be opened since last year, when HART canceled bids to build the first nine stations together.
Those bids came in vastly over budget. All three, opened in August, exceeded rail’s budget for the work by more than $100 million. HART opted to start over, breaking those stations into groups of three in hopes of curbing the costs.
The bids opened Tuesday represent the second batch of three stations. HART is slated to put out requests for the next batch of stations in August.
