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It’s been a rocky couple of months for the folks at the Honolulu Authority for Rapid Transportation, the agency tasked with building the city’s embattled $10 billion-plus East Kapolei-to-Ala Moana rail line.
A series of forecasts since August show costs rising and anticipated revenues dropping for the most expensive public works project in Hawaii history, leaving a hole of about $1 billion. Mayor Kirk Caldwell and City Council members have stepped up their criticism about the project’s management. Meanwhile, a decision by the HART board on whether to retain Executive Director and CEO Andrew Robbins has yet to be made despite months of discussions that have taken place behind closed doors.
On Tuesday the all-volunteer HART board is set to take a critical vote on whether to fish or cut bait on a two-year effort to secure a partnership with a private group to help finance construction of the project’s last 4-mile leg into urban Honolulu.
The stakes couldn’t be higher.
HART needs to come up with a revised action plan in the coming weeks that will satisfy the brass at the Federal Transit Administration or risk losing $250 million in promised funding that’s due to lapse Dec. 31.
Nailing down a public-
private partnership (P3) agreement was supposed to be the critical component of the delivery plan that’s to be submitted to the feds, but that process has met with a series of delays.
There are strong indications that at least one of the two (and possibly three) P3 proposals is coming in far higher than the $1.6 billion that HART had projected for the work, which includes building the section from Middle Street to Ala Moana coupled with the critical Pearl Highlands garage and transit center and a 30-year operations and maintenance agreement.
Critics argue that if that’s the case, there’s no point in trying to reach a P3 agreement when the primary objectives of the P3 were to provide cost and schedule certainty, shift risks to the contractor and provide a more cost-effective means to build, operate and maintain the project.
But citing laws that preclude wide dissemination of bid details until a procurement process is over, HART board members themselves have been kept in the dark and haven’t even been told whether there are two or three finalists.
Robbins wants to be allowed to continue the P3 process for at least the next few weeks. If he and his staff cannot reach an agreement that they can take to the board, he at least hopes to gather more intel from the bidders about how they arrived at their cost figures to come up with a Plan B that will satisfy the FTA.
Complicating matters is that Caldwell, who is supposed to be in step with HART in procuring a P3, announced last month that he is withdrawing his support for the process and that he instead wants the project
to go back to a traditional design-build model. The administration and HART are supposed to be working together because while HART is tasked with building the project, operations and maintenance of the finished product is the kuleana of the mayor’s Department of Transportation Services.
While Robbins has said HART can negotiate a P3 without the administration, Caldwell and others believe that runs counter to what’s in the Full Funding Grant Agreement under which the FTA provides $1.55 billion for the project. Of that amount, $744 million has been withheld since 2017, including the $250 million now due to lapse at the end of the year.
HART’s Government Affairs/Audit/Legal Affairs Committee voted behind closed doors Oct. 15 to recommend that the full board direct Robbins to nix the P3 procurement effort and instead work with the Caldwell administration on coming up with an alternative method to complete the project.
That directive, formally known as Resolution 2020-5, is what’s before the board Tuesday.
“The Board has determined as a matter of policy that further pursuit of the P3 Procurement is impracticable,” the resolution states.
It goes on to cite three reasons: Caldwell’s decision to back away from the process; financial issues caused in part by the coronavirus pandemic that have led to both higher costs and a drop in excise and tourism tax revenues; and ongoing issues with completing the relocation of underground utilities through the town segment.
The resolution notes that work to relocate utilities is now nine months behind schedule due to design and permitting issues and that HART is trying to procure a second contract to help speed up that process. It also points out that utilities relocation needs up to 70 right-of-way parcels that have yet to be acquired and that some are in the midst of litigation.
At the center of the delays in underground utilities is HART’s failure to obtain necessary approvals from city agencies for the work along the problematic
Dillingham Boulevard corridor from Middle to Kaaahi streets due to ongoing disputes over incomplete drawings and plans the agency submitted.
Those disputes were the focus of a discussion before the City Council Transportation Committee on Thursday.
City Environmental Services Director Lori Kahikina and Honolulu Board of Water Supply Manager Ernest Lau voiced dismay at HART’s efforts during the summer to seek a waiver for its plans rather than adhere to design standards.
Meanwhile, Robbins told the committee that it will take nine to 14 months to obtain all the properties and easements needed to complete construction.
Asked by Council Budget Chairman Joey Manahan whether the recently given estimate of $1 billion more for the project — to $9.131 billion before financing costs from $8.21 billion — would be enough for the remaining segment, Robbins said, “When we presented the estimated completion (cost) to our board, we did indicate it was a draft, or preliminary. We continue to work on it.”
Robbins’ future at HART remains unclear. A vote last month by the full board to remove him failed to pass despite a recommendation from the board’s Human Resources Committee. That same committee is slated to meet Tuesday, just before the full board meeting, to continue discussion on “HART Leadership and Transition.”
One of the items on the full board’s Tuesday agenda is to decide on establishment of an ad hoc committee to “investigate HART leadership and transition.”
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