Rail watchdog ‘not confident’ $8.2B price tag to remain fixed

In its most recent report, the federal contractor overseeing Honolulu rail says it is “not confident” the project’s total construction price tag will remain at $8.2 billion.

The statement — unprecedented from rail’s longtime watchdog, Jacobs Engineering Group — was included in the firm’s monthly Project Management Oversight Contractor report for August. Rail officials say the document was released publicly in September, coming after the Legislature’s special session to fund rail at the $8.2 billion construction cost.

In the report, Jacobs doubts the city will have rail ready to operate by its latest December 2025 deadline, and it flags continued uncertainty over the project’s largest outstanding construction contract.

The procurement of that work to build the final 4.3 miles of guideway and eight stations in the heart of town was canceled Aug. 24. Instead, the Honolulu Authority for Rapid Transportation opted to start the selection over after the process languished for nearly two years.

Under its latest timeline, shared at a rail board meeting Thursday, HART doesn’t expect to award that contract, valued last year at about $1.4 billion and dubbed the “city center guideway and stations,” until August 2019.

Jacobs’ staff knew that cancellation was coming when they made those comments in their August report, HART officials said Thursday.

The uncertainty affects other rail contracts that are already active, according to the Jacobs report. For instance, HART cannot definitively tell Hitachi-owned Ansaldo Honolulu JV, which is creating rail’s operating system, when it will have access to all of the transit line’s guideway and stations.

“Until these dates can be provided to (Ansaldo) the contract schedule cannot be finalized,” the report stated. Jacobs officials did not respond to a request for comment Thursday afternoon.

However, HART leaders say that Jacobs’ doubts in August already are outdated and that its concerns already have been addressed.

A new approach

In recent meetings with Jacobs and the Federal Transit Administration, the local rail agency shared a new approach that it believes will keep rail’s opening on schedule despite the delays in awarding the contract, said Andrew Robbins, HART’s executive director.

Originally, the bulk of rail’s unpredictable and costly utility relocation work in town — previously considered one of the biggest risks to the project’s success — was included in the larger city center guideway and stations contract.

Now HART plans to bid that utility work under a separate contract valued at about $200 million and start the work in March, according to Robbins and HART’s project director, Sam Carnaggio.

That’s more than a year before the main guideway and station work is expected to begin, according to HART’s latest timeline.

During meetings last week in Atlanta, “the FTA was concerned about our plans and our strategy for completing the city center guideway segment,” Robbins told the board Thursday. After HART shared its plan, “They were very pleased,” Robbins added. “This answered a lot of questions they had floating around in their minds about what we were up to.”

At Thursday’s meeting Carnaggio also presented to the board HART’s new director of risk management, Paul Johnson.

Johnson, whose resume with the professional networking site LinkedIn lists nearly 40 years of experience in construction management, has been on the job for about three months. On Thursday he told the board he intends to constantly monitor risks faced by the agency’s various departments.

Honolulu’s rail project has seen its estimated construction costs soar dramatically in recent years, jumping from some $5.26 billion in December 2014 to more than $8 billion in May 2016. However, HART officials have held firm in their $8.16 billion estimate since summer 2016. With financing costs, the official estimate now hovers at around $9 billion.

HART also expects to put out by Monday a solicitation to hire its own “public-private-partnership adviser” — someone who would advise the agency on ways to involve private investors to help save costs.

“We expect a lot of innovation in this project that could result in quicker construction,” Robbins said Thursday.