Honolulu Rail Project - Construction Bids Much Higher than Anticipated

The Honolulu Authority for Rapid Transportation (HART) which oversees the Honolulu Rail Project, had budgeted $184 million, including contingency dollars, to build the first nine rail stations which would run from Kapolei to Aloha Stadium.  However, when they unsealed the bids from three local construction companies, the lowest one, from Nan Inc., came in at $294.5 million.  The other two, from Nordic PCL and Hensel Phelps came in at $312.3 million and $320.8 million respectively. Shocked by these much higher than anticipated construction costs, rail officials are uncertain if they will be able to deliver the entire project on budget.  Don Horner, the Vice Chairman for HART stated, "Clearly our estimates right now are suspect."

Dan Grabauskas, the Executive Director for HART blamed the fact that recent legal challenges halted constructed for more than a year.  Grabauskas believes that the construction market has shifted, and as a result companies can charge more money.  Regardless, it is unclear how much all of the construction projects will costs, and where the money to complete the rail project will come from.  HART had set aside $563 million for contingencies, but that amount is quickly being eaten away

Source: Honolulu Star Advertiser, 8-15-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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