Officials of Honolulu’s rail transit project are blaming delays in construction start for an added cost of $15 million to pay the company contracted to build the first segment. The costly change order is not about to stall the massive undertaking, but it is a timely reminder to the Honolulu Authority for Rapid Transportation that the public is watching intently and that any action short of openness will breed suspicion.
Upon forming last July, HART’s board commendably committed to opening all its books, recognizing that "openness and transparency are fundamental to promoting efficiency and effectiveness in government and strengthening the democratic process." Public access is vital for a project expected to cost $5.27 billion, and last week’s disclosure of this $15 million "gulp" before construction even begins is a reminder that the lights are brighter than HART directors might think.
This episode has spurred HART to adopt a new policy on change orders, including that those over $1 million go before its Finance Committee and the full HART board, committee chairman Don Horner told the Star-Advertiser’s editorial board this week. This is welcome news indeed.
HART had signed nearly $3 billion in contracts by December, a third of which amount was assigned to the Kiewit construction company, although much of that contracted work had yet to begin. In this case, HART had signed a 2009 contract with Kiewit Infrastructure West Co. to build the rail guideway, but Kiewit incurred extra cost due to delays in the work schedule because the Federal Transit Administration’s approval of an environmental impact statement came later than anticipated.
Such delays are to be expected, so rail’s total projected cost includes an $860 million contingency fund to deal with change orders and other yet-unknown cost increases. While contracts may be active, HART interim executive director Toru Hamayasu has explained that unexpected delays, such as a company holding back its work, adds installation and "delay claims."
"Kiewit, with our request, mobilized the people so that essentially the equipment, the lease, whatever, all of those are accumulating," Hamayasu told the Star-Advertiser’s Kevin Dayton. "Kiewit is incurring the cost."
The public learned about the $15 million change order to Kiewit through a Dec. 27 letter from Hamayasu to the FTA, after related documents were distributed to the media. Hamayasu wrote that the city had been overly optimistic in awarding the 2009 contract to Kiewit to "demonstrate to the public that tangible progress was being made" on the project.
In years past, such a cost change would likely have been handled by bureaucrats without mention to taxpayers. Such wraps no longer are tolerated — vocal opposition to rail remains steadfast — and the HART board needs to assure the public that important information will be accessible and upfront, not imbedded within its website’s labyrinth layers.
Just days ago, HART did add a "HART monthly reports" button on its webpage (http://www.honolulu transit.org/hart/), a small but helpful step in the right direction.
Soon after becoming HART chairwoman, Carrie Okinaga claimed to recognize the public expectation that "HART’s mandate is clear: oversee the construction and operation of the city’s fixed guideway system in a well-managed and transparent manner."
In actual practice, this needs work. For a project of this scale and complexity, it’s not enough to merely throw information online — it needs to be findable. Ideally, the public can attend HART’s meetings (the schedule is online) but it also needs smart access to government correspondence and other documents — and this includes the rail skeptics who can be relied upon to find cracks in the system. That degree of public oversight is necessary to avoid economic waste in going forward with the most expensive public project in Hawaii’s history.
