The largest contract to ever be awarded in the history of Honolulu has been put off yet again. The $1.4 billion rail deal is being pushed back to allow time to gather more information about the financial stability of rail company Ansaldo Honolulu JV and determine whether problems at Ansaldo’s troubled parent company could affect the Honolulu rail project.
The contract that allows for up to $1.4 billion between the Honolulu Authority for Rapid Transportation and Ansaldo Honolulu JV was scheduled to be signed by today, but HART staff notified the City Council that the signing will be put off.
“I think that’s a wise decision at this particular stage,” City Council Chairman Ernie Martin said. “We recommended at the Council that they proceed very cautiously, just to ensure that if the decision is to go forward with Ansaldo, that they are totally capable of fulfilling the contract. We will be monitoring it very closely.
“It seems that every day there’s another concern that arises.”
Most members of the City Council urged city transit officials last week to delay final approval of the rail transit contract with Ansaldo Honolulu JV. Ansaldo was awarded the contract to design, build, operate and maintain the rail cars for the Honolulu system.
Ansaldo Honolulu is a joint venture formed last year between two Italian-based transit companies, AnsaldoBreda and Ansaldo STS. AnsaldoBreda makes rail cars and has been losing money for years. Ansaldo STS produces and maintains train control or operating systems and is profitable.
Both are owned or partly owned by Finmeccanica SpA, the largest defense company in Italy. Finmeccanica officials have said they are seeking a buyer for the unprofitable AnsaldoBreda, and some published statements suggest Finmeccanica may also be interested in selling Ansaldo STS.
Finmeccanica announced last week it had suffered a third-quarter net loss of 790 million euros, or more than $1 billion. The stock value of Finmeccanica has plummeted 60 percent since January amid the financial losses and a corruption scandal.
This latest unsettling piece of information is reason enough to halt the rail project yet again. It does seem as though this is an endless dance, as for one reason or another final rail transit approval continues to be put off.
Once this passes, what reason will be given to halt the project again? Meanwhile traffic becomes worse and worse by the week.