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Honolulu Rail Authority To Seek Damages For Delays In Completing Airport Segment

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Honolulu Rail Authority To Seek Damages For Delays In Completing Airport Segment

May 15, 2024 | 8:19 am ET
By Kevin Dayton/Civil Beat
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The Middle Street Transit Center station is not quite complete, and Honolulu Authority for Rapid Transportation CEO Lori Kahikina said liquidated damages are accruing for the latest delay. A settlement last year with the contractor called for that station and three others to be finished by Feb. 29. Only one of those stations has been completed so far. (David Croxford/Civil Beat/2024)
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The Middle Street Transit Center station is not quite complete, and Honolulu Authority for Rapid Transportation CEO Lori Kahikina said liquidated damages are accruing for the latest delay. A settlement last year with the contractor called for that station and three others to be finished by Feb. 29. Only one of those stations has been completed so far. (David Croxford/Civil Beat/2024)

The Honolulu rail authority will seek damages that could amount to as much as $40,000 per day from one of the rail project’s largest construction contractors because of delays in completing three rail stations in the airport segment of the project.

If the Honolulu Authority for Rapid Transportation follows through and imposes “liquidated damages” on contractor Shimmick/Traylor/Granite Joint Venture for the delays, it would be a remarkable role reversal.

Last year it was STG that sued the city over construction delays it blamed on HART, and five months ago HART agreed to pay STG $59.9 million as part of a settlement in that case.

STG’s lawsuit originally sought $99 million in damages, alleging HART caused construction delays because it failed to promptly move utilities such as power, water and sewer lines out of the way of STG’s crews.

The lawsuit settlement was the 56th change order for the airport segment contract, which was originally awarded to STG in 2016 for $874.75 million. The final contract amount including all change orders and the settlement is $990 million.

Under the city’s original contract with STG, the airport segment of the project was supposed to be finished in mid-2021.

The December settlement between STG and HART changed the completion date, requiring that the contractor finish four rail stations and the 5-mile stretch of guideway from Aloha Stadium to Middle Street by Feb. 29.

But that didn’t happen. The March Monthly Project Report for rail shows work under that contract is 99.8% finished, but is still not expected to actually conclude until June.

Project Director Vance Tsuda told members of the HART board last month STG achieved “substantial completion” for the guideway and the Pearl Harbor station, but not for three other stations. The unfinished stations are the Daniel K. Inouye International Airport station, the Lagoon Drive station and the Middle Street Transit Center station.

HART board member Anthony Aalto asked HART staff if the city will impose liquidated damages for the latest delay.

“Your question about LDs, the settlement was end of February, so yes,” HART Executive Director Lori Kahikina said. “We haven’t assessed them, but we are accruing them. The LDs started the day after the agreement date.”

“So, we actually may be getting some money back?” asked Aalto. “That would be nice, if we could get some money.”

The original contract between HART and STG allowed for liquidated damages of up to $40,000 per day for delays, according to HART.

Kahikina on Friday declined a request for an interview, but HART said in a written statement that unspecified “outstanding contractual work” on the three stations still hasn’t been completed.

“In most cases, work is pending delivery of materials necessary to complete the work,” according to the statement. It did not provide further specifics.

The HART statement said the liquidated damages to be imposed because of the latest delays will be deducted from future payments HART is obligated to make under the terms of its lawsuit settlement last year with STG.

Andy Sloane, president of Shimmick Construction, and managing partner for the Shimmick/Traylor/Granite Joint Venture, asked for additional time Friday to comment on the issue of liquidated damages, but still had not provided any comment by Tuesday.

HART board members were told earlier this month the rail authority hopes to begin energizing the airport segment guideway in mid-June, and begin actual train testing on the guideway as early as mid-July.

The rail authority is on track to hand over the airport guideway and stations to the city Department of Transportation Services for operations in late 2025, Tsuda said.