The Honolulu Railroad has finally awarded the long-awaited contract to design and build a three-mile elevated rail line and six stations through the city center from Middle Street to the Civic Center station near South Street.
The $1.66 billion proposal from Los Angeles-based Tutor Perini Corporation is intended to eliminate years of uncertainty surrounding the final leg of the 18.9-mile (30.4-kilometer) rail line from East Kapolei to Kakaako – at least for now. Completion is scheduled for 2030.
Tutor Perini was the only bidder, and the company’s $1.66 billion offer will cost $300 million more than the Honolulu Authority for Rapid Transportation estimated in its 2022 turnaround plan, said HART CEO Lori Kahikina.
But Kahikina said Thursday that rail officials are confident the railroad can find the money to make up the difference. That could be done by drawing on “contingency” funds held back for unexpected costs or by finding cost savings on other contracts, she said.
The additional costs could increase the total estimated cost of building HART, but HART must first discuss that possibility with the Federal Transit Administration, she said.
The rail authority had already twice solicited bids to build the route and stations through downtown to Ala Moana, but canceled the first attempt before the contractors could submit their bids.
The second attempt to award the city center project was structured as a public-private partnership, but failed in 2020 because contractors’ bids significantly exceeded the budget. Tutor Perini participated in that round of bidding and submitted a bid for more than $2 billion.
Two years ago, the city decided to cut costs by shortening the line and ending it in Kakaako, eliminating the need for two stations and more than a mile of track.
This led to the tendering of the design-build contract, which was awarded on Thursday and is scheduled to be executed in mid-September. Design work will begin immediately after the contract is signed, and construction is scheduled to begin in the second half of 2025, according to HART.
The end of the rail line at South Street will reduce the system’s projected total ridership by about 30% from original 2012 projections. Kahikina and HART board members have said they are still looking for a way to reach Ala Moana.
To that end, the recent downtown RFP included an option for bidders to extend the system from South Street to Ala Moana Center, but that is not currently possible. The $1.66 billion contract does not include the optional extension to Ala Moana, Kakikina said.
Tutor Perini offered a base price of $325 million to extend the system to Ala Moana, but Kakikina said the city would not accept that additional proposal at this time.
“At this point, we are not looking at Ala Moana. We want to get our finances in order first,” she said. A written statement later said the Ala Moana proposal would require “further negotiations” before it could be awarded and implemented.
The city had pre-qualified two companies to bid on the downtown portion of the project last year, but a conglomerate called City Center Builders JV later withdrew, Kahikina said. That joint venture included local firms Hawaiian Dredging Construction Company and Dragados Construction USA Inc.
Tutor Perini has already been canvassing Honolulu for local contractors who would like to participate in the project, she said.
Ronald Tutor, Chairman and CEO of Tutor Perini Corporation, said in a written statement, “Tutor Perini is proud and excited to be part of this transformational project in Honolulu.”
“We look forward to working with HART to successfully complete this project,” said Tutor.
The award of the downtown contract is also expected to free up $250 million in federal funds that the Federal Transit Administration (FTA) committed to the Honolulu rail project over a decade ago. The FTA has been holding back that money until the city could award the downtown contract at an affordable price.
“This is a huge milestone,” Kahikina said. The City Center Guideway and Stations contract is the largest single construction contract of the entire project, and efforts to award it began about 18 months ago, she said.
The company has a lot of flexibility in planning and building the downtown section of the railway within the boundaries set by HART, Kahikina said.
This means, for example, that the stations would look different than the stations already completed or that elements such as the shade roofs on the ceilings would look different, she said.
“They have to meet certain criteria, but otherwise they can submit their own designs,” Kahikina said.
This flexibility even extends to where Tutor Perini will begin construction and where exactly the guide rail support pillars will be erected.
There is still extensive utility relocation work underway in the Dillingham Avenue corridor, so it may make more sense for the contractor to start building the roadway and stations in Kakaako and work east from there, she said.
Another strategy used by HART to contain costs was for the rail authority to agree to assume part of the inflation risk rather than requiring the contractor to bear all of the risk, Kahikina said.
For example, if the cost of concrete or steel increased dramatically, HART may have to contribute to covering those costs, she said.
The Honolulu rail project will be paid off when it is finally completed, which is “really unusual” for such a large infrastructure project, she said.
