Honolulu rail authority agrees to pay another $160 million in delay claims

The Honolulu rail authority has tentatively agreed to pay contractor Ansaldo Honolulu JV $160 million as compensation for years of construction delays on the 20-mile rail line.

Assuming the Honolulu Authority for Rapid Transportation board approves the proposed settlement on Thursday, that will bring the total settlement for Ansaldo for construction delays to more than $202.6 million to date.

Those delay claims only apply to one piece of Ansaldo’s $1.4 billion “core-systems” contract with the city, which was signed in 2011 and is the largest contract in city history.

The subject of the latest delay claim settlement is a portion of that agreement under which the city agreed to pay Ansaldo $574 million for the design, construction and delivery of the train-control system and 80 train vehicles.

That work that was supposed to be completed by 2019 but the rail project is now about six years behind schedule. The city now does not expect to complete the 20-mile rail line until late 2025, but even that date is not certain.

A consultant for the Federal Transit Administration said in a recent report there is only a 65 percent “confidence level” the project will even be finished by September 2026.

Last week the Hawaii State Auditor said it had tallied more than $354 million in delay claims, including some claims already paid out to Ansaldo. If the HART board approves this latest claim, that will bring the total in delay claims to be paid out by the project to more than $514 million.

HART CEO Andrew Robbins said the new claim will not cause the cost of the overall project to increase because the rail authority had included a sum in its budget to settle the Ansaldo delay claim. Construction of the rail project is expected to cost $9.2 billion including finance charges.

Sources told the Star-Advertiser last year that Ansaldo warned HART officials in 2016 that it planned to seek $200 million in delay claims, but Robbins said the actual claim filed with the city was for $275 million. Negotiators for HART then bargained that sum down to $160 million, he said.