Rail board nears an OK of $7M credit from Ansaldo

Ansaldo Honolulu and city officials are poised to finally settle their dispute over the cost to change rail’s train configuration. If they do, it would help resolve a deeper, long-running disagreement over the type of train that Ansaldo was originally required to deliver under the largest contract awarded in state history.

On Thursday the board overseeing rail will vote whether to accept $6.8 million in credits from train builder Ansaldo for what’s billed as the savings that come from switching from 40 two-car trains to 20 four-car trains.

The two parties have locked horns over the transit system’s train configurations since at least August 2012, documents obtained by the Honolulu Star-Advertiser show. In an effort to move past the conflict, city rail officials called on Ansaldo to switch to four-car trains and claimed that the change could save the project as much as $20 million. However, Ansaldo countered that the change would actually cost the city as much as $4.2 million in added design, production and labor costs.

On Monday, Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas said the rail agency was satisfied with the proposed deal for nearly $7 million in savings. That amount includes savings to complete the 80 rail cars and the transit system’s rail yard, according to documents posted to HART’s website.

“There’s no ill will. When you’re in a negotiation you each try to stake out a position maybe in the extreme,” Grabauskas said of the parties at one point being about $25 million apart. “I don’t hold it against them to stake out” the $4 million figure despite eventually agreeing to a savings, he said of Ansaldo.

Enrico Fontana, Ansaldo Honolulu’s principal program manager and managing director, said the deal “demonstrates the great working relationship we have developed with HART.”

“While this differs from our original estimate, we have been successful in finding additional savings and have (passed) these on to HART,” he said in an email Tuesday.

HART and Ansaldo had originally disagreed over whether the firm was even complying with the terms of its $1.4 billion contract, correspondences show.

Originally, the firm designed a rail system that initially would run only two-car trains, while the city expected a more flexible system that could run a “mixed fleet” of trains of varying lengths. The system Ansaldo had planned to deliver, however, could require weeks of extensive “service interruptions” in order to add any more cars.

Ansaldo, a joint venture of Italian-based firms AnsaldoBreda and Ansaldo STS, beat out two other competitors vying to design, build, operate and maintain the elevated train system.

To move past the contract dispute with Ansaldo — which rail officials did not publicize — HART in 2013 instructed the firm to build 20 four-car trains instead of 40 two-car trains. The stations will be able to handle trains up to four cars long. Grabauskas, who joined HART in 2012, has said that the four-car trains make the most sense and that the city should have asked for them from the start.

But the city and Ansaldo still disagreed on the costs for the switch. The proposal that HART’s Finance and Project Oversight committees will consider Thursday look to end the dispute.

Grabauskas and other rail officials have said that moving to four-car trains will mean easier boarding for passengers, particularly seniors and the disabled.

Still, some official estimates show that the four-car trains would see fewer new riders in the long run. Internal ridership models from former rail consultant Parsons Brinckerhoff showed that the system in 2030 would have 119,600 daily riders with four-car trains compared with 133,800 with two-car trains, email exchanges that included a former Parsons employee showed.

Despite those numbers, Grabauskas on Monday said that the members of Oahu’s public whom they’ve surveyed generally preferred four-car trains. “The customers we talked to said the bigger train configuration would serve them better,” he said. The industry is trending toward bigger trains, he added.

Also on Thursday the Finance and Project Oversight committees are set to approve an $8.7 million delay claim to cover the approximately nine-month delay in 2012 that barred Ansaldo from starting work, when rival Bombardier challenged the award of that contract in court.

The amount will be covered by the Ansaldo contract’s existing contingency, and “at this point” it won’t add to rail’s overall cost, Grabauskas said Monday.