Honolulu Will Pay Train Maker $160 Million To Cover Rail Delays
Rail officials said the settlement with Ansaldo covers a delay of more than 2,000 days.
The city is poised to pay Ansaldo Honolulu JV an additional $160 million on top of an existing $616 million deal to deliver Honolulu rail鈥檚 driverless trains and communications systems.
The settlement, which the board is expected to approve Thursday, will cover more than 2,000 days of delays for Ansaldo since the Hitachi-based firm received a $1.4 billion total contract in 2011 to design, build, operate and maintain the project鈥檚 trains and signaling systems.
It鈥檚 the latest consequence of delays that have plagued the island鈥檚 20-mile, 21-station project for the past decade or so. Last week, a report from the state auditor鈥檚 office flagged a separate $354 million in cost increases that occurred when the city awarded rail鈥檚 initial construction contracts too early.
On Monday, however, HART Executive Director Andrew Robbins touted the settlement with Ansaldo as a win for taxpayers. The sum is far less than the $275 million that Ansaldo originally submitted last fall, Robbins said. Also, it falls within what HART had budgeted to pay out for the claim, he said.
Robbins declined to specify what the rail agency had budgeted, however. He said doing so could hinder HART in its future dealings with the project鈥檚 contractors. Overall, the settlement is covered by the project鈥檚 current $8.3 billion construction budget, Robbins said.
HART officials saw the Ansaldo cost increase coming and budgeted for the expense, even though the magnitude of the dispute publicly didn鈥檛 surface until a board meeting in September, when board member Ember Shinn said the cost would be 鈥mega-substantial.鈥
The settlement removes a key unresolved risk item that had loomed over the project, Robbins said.
The settlement announced Monday only covers Ansaldo鈥檚 costs to design and build rail鈥檚 control systems along the full rail line, which ends at Ala Moana Center. It doesn鈥檛 cover any delay costs associated with Ansaldo鈥檚 operating and maintaining the rail system, which is the second part of its total contract.
Robbins said he expected those costs wouldn鈥檛 be nearly as expensive, since rail’s operations and maintenance weren’t nearly as impacted by construction delays.
The settlement doesn鈥檛 preclude future potential claims from Ansaldo as construction heads into Honolulu鈥檚 urban core. That work is largely thought to be the most challenging of the project.
