Honolulu Rail Asks Losing Bidder to Extend Offer — Just In Case
Even as the city proceeds with plans to award a $1.4 billion contract to Italian rail car manufacturer Ansaldo, it’s also made overtures to a losing bidder to stand by for another month, just in case things go sour.
Honolulu Authority for Rapid Transportation Interim Executive Director Toru Hamayasu told HART’s Board of Directors Thursday in Kapolei that his team is continuing to investigate Ansaldo’s financial picture. The company responded to a letter from Hamayasu1 recently by telling him that there have been no material changes to its finances since it was first vetted more than a year ago.
“Our investigation is focusing to make sure that there is no change,” Hamayasu said.
Meanwhile, the city has asked losing bidder Sumitomo Corporation of America to extend its price offer for another 30 days, just in case. Sumitomo agreed to do so, keeping its offer on the table until Sept. 22 — specifically because it believes Ansaldo is going to crumble between now and then.
Hamayasu said not to read too much into the request, that it’s just a formality.
“I think the strategy is pretty transparent,” Sumitomo Vice President Gino Antoniello told Civil Beat in a phone interview Thursday after the meeting. “The confidence that we have is two-fold: one, that they’re in big trouble with Ansaldo and two, if they want another solution, a fall-back solution which should have been their primary choice to begin with, we’re here.”
Antoniello’s commitment came in a letter sent the same day the company announced it wouldn’t appeal the matter to court. He said a legal appeal wouldn’t have accomplished anything because even if a court ruled in the company’s favor it might just start the process over again. Extending the existing offer for another month is the logical move, he said.
“They can’t be 100 percent sure about this because of the implosion of the parent company and the severity of the financial questions, if you tie it to the past track record,” he said. “We’re sticking around because we know they will trip.”
Ansaldo spokesperson Carolyn Tanaka declined to answer questions about the company’s finances, but did say the company will work with the city as needed.
Sumitomo’s letter to the city details the company’s two main points: that Ansaldo’s finances are in rough shape, and that Ansaldo was not a licensed contractor when it first made an offer to complete the work. Read the letter here:
Hamayasu said the request to Sumitomo is only a formality. Companies’ bids expire 180 days after the final request for best and final offers, which happened in late February. In most cases, the process is wrapped up within that window, but this one has been delayed — and the protests and appeals by both Sumitomo and fellowing losing bidder Bombardier have contributed to the timeline.
“Keeping a second option open is always a good thing to do, that’s all there is to it. You shouldn’t read too much into it,” he told Civil Beat after the board meeting. “There was no big thinking behind it other than, ‘OK, the price expired, it would be good to have it for 30 more days.'”
Asked if he was confident that Ansaldo’s financial questions would be resolved in a favorable manner, Hamayasu said, “This is probably the wrong answer, but I’m not confident or I’m not not-confident. When it comes, it comes.”
“That’s why we have a bid bond. A bid bond is a guarantee that in case these guys pull out, we’ve got something in our hands.”
The guarantee of a bid bond and waiting for Ansaldo’s financials to check out isn’t aggressive enough for some of the HART board members.
Keslie Hui, as well as Vice Chair Ivan Lui-Kwan and Finance Committee Chair Don Horner, said they want to get Ansaldo in front of the board sooner rather than later to answer questions directly. And even though Ansaldo’s formal response isn’t due for 20 days after it receives the yet-to-be-sent contract paperwork, Horner’s committee could hold that conversation as soon as two weeks from now.
“We’ll definitely take that action,” he told colleagues after Hui suggested questioning Ansaldo directly.
Tanaka, the Ansaldo spokeswoman, said the company “will cooperate fully with HART’s request.”
