Kiewit Building Group, the rail contractor tasked with building the first two phases of Honolulu’s controversial $5.3 billion rail project has generated change orders worth $26.2 million.
On Thursday, the Honolulu Authority for Rapid Transportation board of directors approved the most recent change order submitted by Kiewit during a meeting at Kapolei Hale. The $7.2 million payout was caused by delays in providing the contractor with notices to proceed with design and construction of the project. Another three change orders worth about $2.7 million awaits approval by the HART board.
Kiewit was awarded contracts to build the first two phases of the elevated rail line, worth $483 million and $372 million respectively. A third contract to build a train maintenance and storage facility near Leeward Community College was awarded to a joint venture between Kiewit and Albert C. Kobayashi Inc. That contract is worth $195 million.
HART Executive Director and CEO Dan Grabauskas said he’s not overly concerned about the rising cost of change orders, since the project has long anticipated $170 million for such contingencies.
“The important thing for folks to know is we already set aside that money, we just didn't want to say exactly how much because it was still pending negotiation,” said Grabauskas. “Those have been settled, and those have been voted on today.”
However, with last week’s Hawaii Supreme Court ruling forcing HART to stop construction of the rail project, Kiewit Senior Vice President Lance Wilhelm said another change order is likely if the work stoppage drags on.
“There's no hard or fast rule and it really is a function of the kind of work that is being suspended,” Wilhelm told reporters. “It's not merely a question of time, but also scope of work,” he added.
When asked if a change order related to construction delays would compensate Kiewit workers, Grabauskas said negotiations with the company could run the gamut.
“It could include costs for equipment, overhead, personnel – a whole host of different things,” said the HART leader.
According to the project’s July progress report, advancement of the rail line has not kept up with the city’s expectations.