The new construction bids for completion of the massive Hawaii Rail Transit System are all coming in way too high? How high? All bids were over $100 million more than the current project budget. This continues to show that the Hawaii Rail budget is either too low or the bids or simply much too high.
$100 million is quite a discrepancy, so someone is way off here when it comes to estimating how much the project will really cost. Three bids were opened this week and all of them exceeding the Hawaii Rail budget by $100 million or more…. ALL THREE!
The lowest bid came from Nan Inc. and even that bid came in at $294.5 million, which is still 60 percent above the current Hawaii Rail budget. So who is off here? My guess is that our side is the one that is off, and not by a little, by a huge amount.
“Clearly our estimates right now are suspect,” Honolulu Authority for Rapid Transportation board Vice Chairman Don Horner said Thursday.
Horner seems to think the same thing I do. I mean, how can three bids be so far over our mark? It isn’t like construction companies from around the world/nation have banned together to force our budget up.
HART Executive Director Dan Grabauskas blamed the difference on a “volatile” construction market, after recent legal challenges to rail halted construction for more than a year.
When he joined the project more than two years ago, “there wasn’t a crane in the sky,” Grabauskas told HART’s board Thursday. “It’s a pretty red-hot market today.”
There is probably some truth to this, obviously markets change. However, there should be a $100 million discrepancy, not in just two years anyway. The latest setback in rail movement and building is simply another hurdle (one of the many) that Hawaii faces trying to get the Rail Transit System finally built.
Another major contract out to bid, to build the second 10-mile guideway leg of the project, was budgeted to cost at least $750 million, according to Grabauskas. The final bids for that contract will be opened in November, rail officials said.
“We expect that it will be higher” than what was budgeted, Grabauskas said. “I don’t know how much higher.”
The total contingency fund for rail stands at $563 million, and officials budgeted for a balance of more than $190 million upon completion of the project — a sort of “secondary contingency” that could also go toward the spiking construction costs, Grabauskas said.
I don’t see how the current contingency fund for the Hawaii Rail budget will work; not if the initial bids are coming in so far off the current budget. We will see how this develops but our side may want to take another look at how much it is really going to cost to get the Hawaii Rail Transit system built.
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