The parent company of a joint venture seeking a $1.4 billion city rail transit project is facing some additional scrutiny from the Honolulu Authority for Rapid Transit.

City Council members urged HART this week to delay final approval of the rail contract because they said they are alarmed at published reports of major financial losses by the publicly traded parent company of Ansaldo Honolulu JV.

Earlier this year, Ansaldo was selected for a contract for up to $1.4 billion to design, build, operate and maintain the rail cars for the Honolulu system. The city has not yet given final approval to the agreement, which would be the largest contract in city history.

The HART board of directors Thursday scheduled a joint meeting of two HART committees on Nov. 25 to consider new information about the restructuring of Finmeccanica SpA, Ansaldo’s parent company.

The city’s contract with Ansaldo was supposed to be signed by Nov. 25, and it was unclear Thursday whether that contract signing will be delayed or might still be carried out on schedule.

"We have to see what happens with whatever investigation we have to do or if it’s going to take longer than that," said Toru Hamayasu, interim executive director of HART. If necessary, Hamayasu said, HART would seek a "mutually agreed-to extension" of the signing deadline.

The Ansaldo Honolulu joint venture was formed last year between AnsaldoBreda and Ansaldo STS. Finmeccanica, a major Italian defense contractor, owns the money-losing AnsaldoBreda and also owns a 40 percent share of the profitable Ansaldo STS.

Finmeccanica announced this week it had suffered a third-quarter net loss of more than $1 billion, and the stock value of Finmeccanica has plunged since January to lose nearly half its original value.

Finmeccanica Chief Executive Officer Giuseppe Orsi has said he is overhauling the company’s finances to sell off nonmilitary components, including the AnsaldoBreda train-making unit.

Orsi also raised the possibility this week that Finmeccanica might sell off its stake in Ansaldo STS, which is the stronger partner in the Honolulu joint venture. HART officials plan to question Finmeccanica and Ansaldo about that possibility.

A sale of Ansaldo STS could be a concern, depending on the identify of the buyer and the terms of the sale, Hamayasu said.

Don Horner, chairman of the HART Finance Committee, said his committee and the HART Project Management Committee will scrutinize the technical and financial capacity of the joint venture to be sure it can complete the rail project.

HART did a similar review when the planned sale of AnsaldoBreda was first announced last summer, but "we’ll be looking at what happened during the last 90 days, and a lot has happened," Horner said.

If the review shows nothing significant has changed with the Ansaldo joint venture, "my assumption is the procurement process would more forward, because we have financial obligations as a board, and construction and other liabilities that we must continue to move forward," Horner said.

"We’re never going to satisfy everyone, but our job is to satisfy ourselves as representatives of the public that the process has integrity and is effective," he said.

In other action the HART board gave preliminary approval to a $22.8 million operating budget and a $491.5 million construction budget for the year beginning July 1, 2012.

The draft budgets will now be forwarded to Mayor Peter Carlisle and the Council for their consideration and input, Horner said.

The HART board also gave preliminary approval to a draft plan for recruitment of a new executive director. HART has approved a contract for up to $152,000 to hire Washington, D.C.-based firm Krauthamer & Associates to conduct the national and international search.

The board has not made a final decision on how much the new executive director will be paid, but the draft budget approved Thursday includes $250,000 to $350,000 for salary.

Hawaii News Now video: HART reviewing $1.4 billion Ansaldo contract