Honolulu Rail's Next Stop?
Since Honolulu Mayor Peter Carlisle came into office, the $5.3 billion elevated-rail project has gone into overdrive—and so have its critics.
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Challenge No. 2: The contract-bid protests
Shortly after the city prevailed over Paulette Kaleikini’s lawsuit, it was hit with another legal challenge. In March, city officials announced they were going to award rail manufacturer Ansaldo Honolulu a construction and operations contract for the approximate 80 train cars and the rail’s core systems. The announcement was still breaking news when the City Council and the media challenged the actual dollar amount for the contract and the company’s poor track record. The city originally said Ansaldo would receive $574 million, but neglected to mention the contract’s operation and maintenance portions. After the dust settled, following intense Council meetings, the actual price tag was $1.1 billion. To make matters worse, other cities, such as Los Angeles, had problems with the Ansaldo parent company: train cars were delivered late, some with technical problems. A Denmark company that operates the country’s mass transit is trying to break its contract with Ansaldo for these reasons.
What will be impacted?
The Historic Hawaii Foundation has identified 33 historic sites on Oahu that will be adversely impacted by the rail project, including these below.
City Council members weren’t the only ones critical of the contract decision. Sumitomo Corp. of America, and Bombardier Transportation, the losing bidders for the city’s largest public-works project, filed contract protests, stating that Ansaldo shouldn’t get the contract. Bombardier officials also allege they were improperly disqualified from the bid process.
At the end of June, Mike Hansen, the city’s chief procurement officer and its budget and fiscal services department director, rejected both bid protests. According to a city press release, the department found "no procedural or legal violations in any aspect of the procurement." That didn't fly with Sumitomo and Bombardier; a few days later, both companies filed an appeal with the state Department of Commerce and Consumer Affairs (DCCA). If they are later not content with the DCCA’s decision, they can next file appeals with the circuit and appellate courts. Ansaldo can also file a protest. [Editor's Note: See the update on page 1 for more information.]
Will this derail rail?
It won’t stop rail like the lawsuit could, but it has caused delays and, until the two bid protests are resolved, any major work on the rail project will remain at a standstill. Council member Ernie Martin, who’s also an attorney, says because it’s a big contract, he expects the parties will end up in court. “I anticipate it could take a couple of years to resolve.”
City officials declined to comment on the protests, except that, again, the filings did not surprise them. Hamayasu points out that the city has awarded other contracts successfully, such as two contracts totaling $855 million to Kapolei-based Kiewit Pacific Co., which will build the first two phases of the route, from Kapolei to Aloha Stadium.
For some City Council members, the Ansaldo kerfuffle only added fuel to their transparency concerns with the executive branch. “I was disappointed when the Ansaldo issue came up that [Mayor Carlisle] didn’t directly address it. It probably would have created less controversy and less concern,” says Martin, the Transportation Committee vice chair and Budget Committee chair.
In April, Martin and Harimoto traveled to San Francisco, Los Angeles and Copenhagen, Denmark—on the taxpayers’ dime—to check out those cities’ rail systems, all of them Ansaldo projects. It remains to be seen what exactly they observed—because of the protests, city lawyers coached them on questions to avoid asking during their visits, and have cautioned against revealing their findings to the public and the media. They still haven't released their full assessments.
Martin did say, however, that San Francisco officials were mostly satisfied with Ansaldo. “But they also experienced some difficulties,” he adds. “They’re an Italian company, so the difference in time with respect to working with them, because although Ansaldo has entities within the area, all their major decisions are based in Italy.”
Harimoto says he didn’t find anything “earth shattering” about Ansaldo’s work in Copenhagen.
Both Council members were more excited to talk about TOD, transit-oriented development. “That’s the exciting part about rail, it’s not rail itself,” says Martin. “I don’t think the city has done a good job of marketing TOD.”
Hamayasu claims it’s too early to discuss TOD with developers, and wouldn’t talk about it with us.
But Slater says TOD talks have already begun, citing the Hoopili project in West Oahu as an example. “There’s a huge amount of money involved in [rail.] Developers like it because, if you build a rail line, it makes it look more likely that the land that they own will convert to developable property.”