The Honolulu Authority for Rapid Transportation has awarded Nan Inc. a nearly $500 million contract to relocate utility infrastructure along Dillingham Boulevard for ongoing construction of the city’s rail system.

The utility relocation in Kalihi is expected to be one of the most challenging and crucial steps to completing the rail project.

HART announced the deal with Nan Inc. on Thursday, but there is a 10-day period when other bidders can file a protest of the contract award.

“Awarding the contract for the utility relocations for Dillingham Boulevard is a huge accomplishment for HART as it is the final large contract before we get to the actual guideway and station construction through this corridor,” said HART Executive Director and CEO Lori Kahikina.

“It is also worth noting that this bid was lower than our independent cost estimate by approximately 3%. We look forward to working with Nan Inc. on this important project and are committed to its success.”

This is the second time Nan Inc. has gotten a contract for rail utility relocation. In 2018, HART awarded the company a contract for up to $400 million to relocate utilities in the Honolulu city center to make way for construction of the elevated rail line. However, due to delays by HART, the contract was canceled earlier this year.

The utility relocation on Dillingham Boulevard is expected to start in the first quarter of 2023 and continue to the beginning of 2026.

Construction will begin at the corner of Laumaka Street and Kamehameha Highway along Dillingham Boulevard, ending at Kaaahi Street. The stretch encompasses several shopping centers, and businesses in the area have started thinking about how the construction could affect their establishments.

Emily Wu, a co-owner at Hana Tea, a popular cafe on Dillingham Boulevard, said she expects the construction project will likely clog traffic in the area.

“I heard about it (Wednesday). My partner just told me about what is going on … so I don’t know. So far, we don’t have any preparation,” she said.

“I think it’s going to impact a lot of businesses. It’s going to be very trafficked after they start.”

Kristopher Lopez, supervisor at Egg Head, a restaurant in Kapalama Shopping Center on Dillingham Boulevard, was not too worried about the project causing possible traffic problems for the business because, he said, there is ample parking in the shopping center.

“We do have a back access as well, which may be beneficial for us,” he said. “Because we do have that back end, it’ll help us steer traffic in that direction, if anything.”

Lopez added that once the rail system is completed, it could be beneficial for the restaurant.

“We get a good amount of guests at the moment, but given now that it would be increasing traffic towards this area, it probably would help us,” he said.

The rail is expected to be completed in 2031 and will likely run from East Kapolei to the Civic Center. HART submitted its recovery plan to the Federal Transit Authority to shorten the route by about 1.25 miles instead of ending at Ala Moana Center as planned, due to funding constraints.

The FTA has not yet released its decision on the recovery plan.

HART is working on similar utility relocation from Kaaahi Street along Nimitz Highway through the downtown area, and from Hale­kauwila Street to Cooke Street in Kakaako. Frank V. Coluccio Construction Co. began the downtown utility relocation this month.

The work in both the Dillingham and downtown locations includes moving underground and overhead utilities that would cause problems with the rail guideway and columns. The relocation work also involves improvements to certain sections of the utility infrastructure.

The construction will require the closure of traffic lanes, sidewalks and on-street parking as needed during daytime and nighttime hours.

HART will continue to have community meetings and will set up a 24-hour hotline to answer questions from the public about the project.