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Change orders totaling $15 million approved for rail

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CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM

The latest $15 million in change orders for Honolulu’s rail system will be covered by the project’s contingency fund, with a reported balance of more than $450 million, officials say.

The Honolulu rail board approved nearly $15 million in additional change orders Thursday — the latest tranche of money to help cover changes to construction contracts that project leaders have said the city issued prematurely.

Those funds will also help cover the costs of rail’s delayed opening. Under earlier plans rail was supposed to have started running from East Kapolei to Aloha Stadium in September 2016, but that interim opening has now been pushed to July 2020, according to the Honolulu Authority for Rapid Transit.

The full 20-mile route’s opening has been pushed to December 2025, but rail’s independent overseers have recently questioned whether that target is realistic.

More than $6 million will go to Kiewit Infrastructure West, as the firm building the system’s first 10 miles continues to make revisions to its columns and elevated guideway so it will support the load of the rail stations.

The city awarded Kiewit contracts to design and build the guideway in 2009 and 2011 — before the contracts to design the stations went out.

Those station and guideway contracts should have been awarded together, former HART Executive Director Dan Grabauskas said in 2014 when the rail agency approved an earlier $6 million additional payment to Kiewit to address the issue. (Grabauskas joined HART in 2012 and resigned in August.)

On Thursday, HART West Construction Manager Kai Nani Kraut told the rail agency’s board that the station loads were officially changed in late 2013. Her presentation on the Kiewit change order came about a week after a panel of transit industry experts issued its peer review of HART. It concluded the agency’s staff was dedicated but that their progress was nonetheless hampered by claims stemming from years-old decisions their predecessors made.

“What the HART organization has been grappling with … stems from decisions before HART was created,” HART board Vice Chairman Terrence Lee told the Honolulu City Council’s Budget Committee later Thursday. “I can’t judge why it was done that way. I wasn’t involved. We’ve been dealing with these legacy problems. I’m frankly very proud of how the HART staff has responded to these challenges that they didn’t create.”

Kiewit’s latest $6 million will also go toward reinforcing underground sections of the West Oahu guideway near a channel that’s more susceptible to erosion than originally thought, HART officials said.

The remaining $8.7 million awarded Thursday will cover delay impacts to Ansaldo Honolulu JV, the firm contracted to design and build the train cars as well as the communications and controls system. Delays in building stations have kept the firm from running the proper tests, and delaying those tests then pushes back rail’s opening, Deputy Director for Core Systems Justin Garrod said in his board presentation Thursday.

The $9 million is a preliminary figure that’s expected to grow, rail officials said.

The project’s contingency fund, with a reported balance of more than $450 million, will cover all of the costs, officials say. HART has already approved more than $284 million in change orders to Kiewit to build the first 10 guideway miles and an operations and maintenance center, according to the agency’s most recent reports. The agency has approved nearly $27 million for Ansaldo in change order increases, the report further stated.

A former rail consultant who left the project last year amid disagreements with HART has said that Kiewit expects to lose about $100 million on its contracts to build the first 10 miles of guideway. Kiewit has declined to say whether that’s accurate.

Last fall, rail officials said that some $65 million in unresolved change orders remained with Kiewit. The Omaha, Neb.-based firm chose not to bid on the next stretch of work past Aloha Stadium.

Lee is not the first board member to criticize how rail’s earliest construction contracts went out. In February 2016, U.S. Rep. Colleen Hanabusa, then a rail board member, said, “Maybe we didn’t have a clear enough idea what we were doing” when the city awarded construction contracts to Kiewit Infrastructure West in 2009 and 2011, plus another contract to the joint venture Kiewit/Kobayashi in 2011.

In 2014, when the HART board approved several change orders for Kiewit totaling $57 million, then-board member Don Horner said the need for those approvals showed “our planning and our designing on the front end was weak.”

In August another former HART consultant, who was terminated after working about six months on the project, advised in a lengthy letter sent to rail leaders after his departure that the multimillion-dollar change order on the station loads would soon come before the board for review.

The consultant, Bart Desai, questioned how those overseeing the project handled the early contracts.

“One could ask a question: Could HART have designed stations without much or no impact to the guideway elements? Or should HART have waited to delay issuance of Notice to Proceed (NTP) of the guideway project and give time to complete 75-90 percent design of station structure elements?” Desai, who dealt with claims on the project through subcontractor PGH Wong Engineering Inc., wrote in his letter. “Such option(s) would have saved the taxpayers multi-million dollars.”

HART launched in 2011. Prior to that, city officials oversaw rail.

For the next stretch of rail construction, from Aloha Stadium to Middle Street, the stations and guideway are being designed and built as part of the same $875 million contract. The joint venture Shimmick/Traylor/Granite is expected to start that work later this year.

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