HART Reaches Nearly $60 Million Settlement With Rail Contractor STG
The suit had sought at least $99 million from HART. Agency leaders say the agreement won’t impact rail’s overall price tag.
The board overseeing Honolulu rail construction agreed Thursday to pay an additional sum of $59.9 million to one of the transit project’s largest contractors, Shimmick/Traylor/Granite Joint Venture, to settle that venture’s lawsuit over expensive construction delays plus any other remaining claims.
With the settlement, the Honolulu Authority for Rapid Transportation hopes to resolve once and for all the costs associated with long-standing utility relocation problems near the Honolulu airport. in the suit it filed this past summer.
The rail agency also aims to set the final price at $990 million for STG to build just over five miles and four stations of the Skyline rail. Originally, STG was awarded in 2016 a nearly $875 million contract to build that segment, running from Aloha Stadium to Middle Street.
The deal represents the 56th change order to that contract, according to HART Project Director Nathaniel Meddings.
Still, the contract remains a success at the new, higher price based on Federal Transit Administration standards, Meddings told board members Thursday before they voted to approve the deal. The FTA, Meddings said, considers so-called design-build contracts that climb no higher than 15% over budget to be successful. The STG contract has now grown by just over 13%.
“I hope this represents us finishing as partners where we started. We’re happy with the quality of work out there with STG,” Meddings said. “It got a little bit rocky at the end, with some new faces,” but in the end HART considers the partnership a success.
“There was a lot of change in managers on the STG side. I think that provoked some of this follow-on negotiations and ultimately the mediation, but we were able to get through that,” Meddings said.
STG will be paid half of the $59.9 million sum up-front, then get the rest in five installments as the venture finishes the elevated guideway and the four stations, he added.
The STG settlement does not affect the rail project’s overall cost estimate, according to Meddings. That cost stands at $9.9 billion to build a nearly 19-mile route with 19 stations that gets as far as Kakaako.
HART board members first disclosed in April 2020 that STG had leveled a delay claim against the agency related to incomplete utility-relocation work around Ualena Street. HART’s then-chair of the board’s Project Oversight Committee, Glenn Nohara, put the amount at approximately $40 million.
However, the suit that STG eventually filed in July sought $99 million in damages. In it, the venture claimed that HART knew well in advance of the problems looming with utility relocation around the airport, and that the agency “has only itself to blame.”
On Thursday, Meddings said that while STG filed the lawsuit it never officially served HART with that legal action. “That was a tact on the STG part. It got us to mediation, it got us to the table.”
Earlier Thursday, the HART board’s government and legal affairs committee considered the deal in executive session and opted to pass it on to the full board. The settlement was then posted moments before HART’s general board meeting.
Natalie Iwasa, one of the Legislature’s representatives to the board, noted the public did not get much time to examine the settlement.
Still, other board members, including Michele Chun Brunngraber, said they were pleased with how the deal worked out.
“In reality we all work together and we work really hard,” Brunngraber said Thursday. “It’s important to keep the working relationship even though we might have differences of opinion and we might have legal matters outstanding.
STG could not be reached for comment late Thursday, but the board said it would issue a joint statement with the venture regarding the settlement.
The STG work is now set to be done by February, and the segment is slated to open for service in 2025. Previously, it had been
