Bids by companies vying for a contract to build three rail stations near Pearl City and Aloha Stadium were opened Tuesday, with the apparent low bidder submitting a proposal to build the stations for $112.7 million.
The bid by Watts Constructors to build stations at Pearl City, Pearl Highlands and Aloha Stadium was within the most recent projections by the Honolulu Authority for Rapid Transportation. HART will now review the bids to ensure they comply with the rail authority’s requirements before making an actual award.
The results of yesterday’s bid opening offered a bit of good news to HART as it seeks to restrain the spiraling costs of the 20-mile, $6.57 billion rail project.
This is the second time the rail authority has bid out these stations, and HART Chief Executive Officer Dan Grabauskas said rebidding nine stations this year shaved more than $41 million off the price HART was offered last year for the same work.
HART’s goal has been to get more bidders to participate and to obtain lower prices, and that has been happening, he said.
“The good news, I would say, is I think our staff has finally got our arms around where we see the costs climbing,” Grabauskas said. “I think that our bid documents are better, we’re talking the language of the construction companies, they’re hearing that (it was) a good round of competition, and prices are where we want to see them.”
Last year HART scrapped bids for a larger, nine-station contract after the lowest bid for the package came in at $294.5 million — more than $100 million above what HART had budgeted. That package included the Pearl City, Pearl Highlands and Aloha Stadium stations.
HART then reconfigured the nine-station package as three smaller units made up of three stations each in the hope that more bidders would compete for the work. The idea was that the smaller packages would increase competition and reduce costs.
Grabauskas said HART also stripped some features out of the original specifications to try to reduce costs, such as eliminating a requirement for exposed aggregate surfaces on the station steps and platforms. The rail authority adjusted bid specifications to allow companies to use less costly materials, and the rebidding also gave companies more time to prepare, he said.
That strategy appears to be helping to curb costs. In June HART awarded the construction bid for the first three stations in the Waipahu area to Hawaiian Dredging Construction Co. for $78.9 million. That included the stations at West Loch, Waipahu Transit Center and Leeward Community College.
IN July Hart awarded the construction contract for the next three stations — the Hoopili, East Kapolei and University of Hawaii at West Oahu stations — to Nan Inc. for $56.1 million.
If HART awards the contract for the Pearl City, Pearl Highlands and Aloha Stadium stations to Watts, that will mean the bids this year for all nine stations total about $247.6 million, which is considerably less than the 2014 bids for the same stations.
The cost for the nine stations is still higher than the rail authority had originally budgeted, but rail officials say they are contending with an overheated Oahu construction market where costs have been rising rapidly.
Grabauskas said the bid package opened Tuesday involved some particularly expensive stations. The Aloha Stadium station includes a 600-stall parking lot, and the Pearl Highlands station will be built over a wetland that will significantly increase costs.
HART also adjusted the requirements for the bids that were opened Tuesday to exclude an H-2 freeway traffic ramp that was in the original 2014 bid package. That ramp was bid out separately earlier this year and awarded to Royal Contracting Co. for $5.2 million, according to the rail authority.
HART officials announced in December that the rail project faced a $910 million shortfall, in part because construction costs have rapidly increased as the Oahu economy heats up, and also because lawsuits and contractor delay claims added $190 million to the cost of the project. Rail officials also point to extra, unexpected costs to move utilities along the rail route, and additional debt financing costs as factors that caused the rail price tag to increase.
The Honolulu City Council will consider a bill today to extend the Oahu half-percent excise tax surcharge for rail until 2027 to cover the increasing cost of the project.
