Diary

Zuri Aki testifies against Act 55.

Runaway Overruns

At HART, what the public thinks of as cost overruns is a “draw down” from the Rail contingency budget.

In addition to the previously reported $15 million draw against the Ewa-Waipahu design/build project, overruns on that one project alone seem likely to at least triple and perhaps more, to judge from the discussion at HART’s budget meeting on Thursday, Aug. 29.

The previous $15 million payment to Kiewett Construction for its late start only covered overhead, as it turned out.

In addition, the Board approved another $7.2 million cost overrun payment for design. This sum covered only design items on which HART and Kiewett agreed. Other design items are still in dispute. This makes the running total $15 million + $7.2 million + x.

A likely much larger figure to be added is for construction. The cost manager, Lorenzo Garrito, was asked if construction was likely to be a larger problem than overhead and design combined. He said yes. Conservatively, the cost then becomes two or more times the $15 + $7.2 + x. Negotiations with Kiewett continue.

These particular cost overruns resulted from the City’s signing a huge design/build contract with Kiewett in 2009 as Mayor Mufi Hannemann pushed for groundbreaking and start of construction in advance of the 2010 election.

The Board also approved a change order payment of $932,000 for cutting, moving, storing and nursing more trees than anticipated.

It additionally approved $940,000 for an unforeseen grading problem having to do with the elevation of the Rail project and the elevation of developer D.R. Horton’s surrounding land.

Don Horner, HART finance chair, has been pushing for a simple statement of money spent and results achieved. At the meeting he insisted that this information be organized in simple terms and published monthly in the press. “This is not a marketing piece,” Horner said. “We’re beyond trying to sell this to the public.”

There was a testy moment when Wayne Yoshioka, head of the City Department of Transportation Services, differed with Horner on how such a publication should be budgeted. Horner said, “It’s been moved and seconded. You can vote against it.” Yoshioka voted aye, as did everyone else.

The news on work progress (prior to shutdown) was not good either. By the emerging metrics that Horner is fostering, Kiewett had finished less than half of its goal of 4.5 percent.

When will HART get a firmer grip on costs?

Daniel Grabauskas, chief executive, said he expected to conclude a Full Financial Agreement between HART and the federal government by the end of 2012.