The Honolulu Authority for Rapid Transportation boosted a work contract to nearly $1 billion to settle a lawsuit with the builder of the second segment of Skyline’s route past the airport, the rail agency says.

On Thursday, HART’s board of directors voted to approve a proposed settlement with Shimmick/Traylor/Granite JV, also known as STG, for more than $59.9 million.

That approval, considered a change order under what’s being termed a “global settlement agreement,” means the builder’s most recent contract amount of more than $930 million will be increased to a total contract price of $990 million.

In exchange, STG will finish the 5.2-mile route of elevated guideway and four stations and associated facilities from Joint Base Pearl Harbor-­Hickam to the Middle Street transit center by March.

To that end, the settlement agreement extends the date for substantial completion of the airport project from Dec. 8, 2021, to Feb. 29, 2024, the agreement states.

HART asserts the second segment will be open to the public by mid-2025.

STG did not immediately respond for comment over its settlement with the rail agency.

On July 6, STG filed a more than $99.1 million lawsuit in 1st Circuit Court against HART for alleged unpaid extra time and work.

The contractor claimed HART failed to compensate the joint venture for delays stemming from a prematurely issued contract and problems with utility relocation work that were beyond the company’s control and held up its work building the rail line toward Kalihi.

Prior to the vote, HART Project Director Nate Meddings said the rail agency reached a mediated settlement with STG on Oct. 3.

“This is a result of that,” he said, adding it took both parties “about a month to get to a signed agreement as we were working through the details of the terms sheet.”

In 2016, he noted, HART awarded STG its original $875 million contract to build the rail line from areas east of Halawa to Kalihi.

He further noted the new settlement raises the original agreement with STG by almost $60 million, to nearly $1 billion. Per that agreement, Meddings said STG will get 50% — or over $29.9 million — of the settlement money “upfront.”

“We’ve negotiated the last payment for the final piece to be paid in five different elements,” he said, noting those include “the guideway, Pearl Harbor station, Lagoon station, the Airport station and Middle Street station.”

Kathleen Kelly, a city deputy corporation counsel, told the board that STG’s “lawsuit will be dismissed once the payments are made.”

“This resolves all pending change orders, claims, other matters that were issues between STG and HART,” she said. “So it’s truly a global resolution, and that’s why it’s reflected as an adjustment to the contract total as opposed to an adjusted amount to settle the lawsuit.”

Since the original STG contract, Meddings said, the rail agency “has processed 55 change orders to date.”

“Mostly scope adjustments, changes to the overall scope and plan,” he said, adding that “this final change order brings us to that total value of $990 million.”

“Basically, that’s our global settlement to the end,” he said, “We aren’t expecting to spend more money on STG; they’ve agreed to complete the project per our requirements for that dollar amount.”

Still, he noted a $20 million cost to the project’s “unallocated contingency.”

“There’s a draw from that,” he said. “This change, though — the overall $990 million — falls within our original estimate at completion for this project … so there won’t be an impact to overall project cost; we can absorb this.”

He added that the Feb. 29 date also “falls within our schedule” to complete the second segment.

Moreover, Meddings said that “the original request from STG was $1.046 billion all in costs.”

“They actually proved that was their cost of the project,” he said. “We were able to negotiate top down and come in with the overall value of $990 (million).”

Before the vote, board member Anthony Aalto said HART’s staff and city attorneys “negotiated a settlement that’s more than $50 million less than (what) STG was seeking.”

“So I think, overall, it’s been quite a success,” he said.

But others, like board member Natalie Iwasa, believed the process lacked transparency.

She noted that the proposed agreement — comprising at least three separate documents — had not been immediately posted to HART’s website prior to the board’s Thursday morning meeting.

“These big documents were just posted not even an hour ago, and so I think it makes it really difficult for the public to weigh in,” Iwasa, a nonvoting member, told the board. “You folks have obviously had a chance to look at this, but anybody who hasn’t had access to those documents until now, it’s just very difficult to try to make sense of it … and it’s difficult for people to try to provide input if they haven’t had more time to look at it.”

Meanwhile, HART’s settlement needs no further action beyond the board’s vote — namely any involving the Honolulu City Council.

“The City Council does not need to approve the STG settlement agreement,” Joey Manahan, HART director of government relations and public involvement, said after the meeting.