After the city signed off on the rail contract with the Ansaldo partnership, valued at either $1.3 or $1.4 billion depending on the source, Ansaldo now says it is the largest contract in the company’s 150-year history.
So not only does it come as Ansaldo faces unprecedented corporate challenges, we now know it is the biggest job they’ve tackled. And, whether its relevant or not, likely the most distant from its home base.
By pushing the contract through in the face of a pending legal challenge and without any final funding commitment from the federal government, the city is again placed in a very awkward situation.
The timing makes it appear likely the signing was rushed in order to beat tomorrow’s initial hearing in federal court in the lawsuit challenging the adequacy of the environmental impact study’s alternative analysis.
You can see the argument being set up. “Yes, your honor, perhaps we were wrong and didn’t do a thorough job in the EIS, but now we’re too far along to turn back without dire financial consequences for the taxpayers of Honolulu.”
Pretty cynical, I know. But why else would the city be taking this kind of risk?
Discover more from i L i n d
Subscribe to get the latest posts sent to your email.
a little (or a lot!) cynicism is to be expected here. But more than a legal strategy, i think this is just a PR play, in keeping with the effort to create the impression that rail is a done deal. I would expect that the contract has multiple outs, and while it is “signed” it still might not be executed. This is pretty standard with govt work. You win the bid/job, but then funding gets pulled or delayed. Or disappears altogether. Likewise, i would guess the plaintiffs could request an injunction to stop all rail related work until their suit is settled.
One last point: I’d be very surprised if pleading dire financial consequences can get you off the hook for proper NEPA hoop jumping. But courts have surprised me many times before too!
I thought this whole re-examination of Ansaldo was an incredible kabuki. So maybe you are right that the faux investigation was a ploy to blunt legal challenges.
Given the many and obvious serious concerns, it seemed impossible for savvy and prudent executives to recommend charging forward with Ansaldo simply because their CEO visited Hawaii and said all the nice words. So obvious was the showmanship that even rail supporters are shaking their head at the spectacle.
Kabuki is the word! As in Kabuki face = two-faced.
I am disgusted by the cities latest antics!
This morning’s poll at Star Advertiser:
What do you think about the city signing the $1.4 billion rail contract with Ansaldo Honolulu JV?
C. Bad move (66%, 289 Votes)
B. OK but nervous (18%, 79 Votes)
A. Good, long overdue (16%, 70 Votes)
Total Voters: 438
Poll Archives
Signing the Ansaldo contract is nothing! The real political “gift” is to start building the *super easy* Phase II Waipahu guideway in February 2012 with the City yet to award the *super hard* Phase III & IV design-build contracts (i.e., where the massive cost overruns will occur when it hits Kakaako iwi kupuna & the City Center’s pre-GPS mapped underground utility lines). Note that the entire Kapolei to Ala Moana Center route has to be completed end-to-end before rail generates revenues because in the interim there is no way to turn around the trains. The City’s risk management is ass-backwards: instead, prudent risk management dictates that you do the *super hard* stuff first to take them off the critical path to make everything *easy* (i.e., build the Phase IV Kakaako segment first). The City’s contracting strategy is to spend down the cash balance in the rail fund so that it doesn’t get raided (and reward the construction unions). What is going on is not right, not pono.
What other cities are involved in building this particular rail system? I realize that Kapolei has often been describted as the Second City, but there is only one government & taxing authority here on the Island of O`ahu – the City and County of Honolulu.
Your take: You can see the argument being set up. “Yes, your honor, perhaps we were wrong and didn’t do a thorough job in the EIS, but now we’re too far along to turn back without dire financial consequences for the taxpayers of Honolulu.”
Your summary of the City and County of Honolulu Rail Transit is what Mayor Peter Carlisle is using already. It’s the MOMENTUM that cannot be stopped, the mayor proclaimed.
What a stupid and greedy way to govern Hawaii.
I wish there was a ‘like’ feature (notafacebooklike) here… well-said.
Carlisle belief that momentum is the way to govern a city is rather scary. I think he is out of touch with the voter and will have a lot to defend when he runs for re-election. Lots of people say that he is an automatic choice because the incumbent has such an advantage, but next year’s election is going to be dictated by the state of the economy more than anything else. With the burden of the Honolulu GET and the 70% increase in water rates and pending sewer fee increases, Carlisle will be held accountable on many issues.
I’m glad they are finally moving ahead. It’s already 30 years behind.
“I’m glad they are finally moving ahead. It’s already 30 years behind.”
I see that comment a lot. Can you imagine what a train run and “maintained” by Honolulu would like after 30 years?
Heck, Mufi Hannemann would even run Harris’s fountains. How do think he would have treated Eileen Anderson’s train?
Honolulu can’t maintain its roads, sewers or parks. How do you think it will do with a train?
Can anyone direct me to some scholarly works on the history of corruption in the Hawaiian Islands? Has one been written? Sidebar. If I were a new FBI agent in Honolulu I would be beginning my investigation now. This will end in shatteringly large waste and corruption. Pull up a chair and watch for it. There is an insufficient number of sufficiently talented individuals to pull this project off. Consider, those that would govern the Islands cannot even run a corruption free Liquor Commission. Remember this?”http://www.governmentauditors.org/index.php/quarterly-articles-mainmenu-123/191-corruption-in-paradise-this-is-not-hawaii-five-o-december-2005″
I think things became clearer with today’s announcement that the Feds will pony up $510M if the City can complete the full funding agreement within the next 13 months.
Had Ansaldo been given the boot, a new RFP would most certainly have been required and that time required for that process would mean Honolulu would have become ineligible for the Fed money.
So, the only answer is the kabuki strategy: we pretend to study the situation, agree that all is rosy and push on lest the smart decision impact the receipt of those Fed dollars.
That’s how I read it.
If I read the reports correctly, the $510 million is the total for all rail projects in this category. If Honolulu gets its federal funding approval within the time allotted, it will get some piece of the pie, not the whole $510 million pie.
You’re right. Looks like $125M if I read the story correctly.
Civil beat is reporting that the city must complete a full funding agreement with the FTA within 13 months or lose a shot at money from a Nov. 18 spending bill. So, they are in a rush. Still, the timing of this contract signing does raise questions in my mind.
Relatedly, in reading the Civil Beat report I came across a quote that I think deserves attention:
“Federal funds are hard to come by in the current budget climate,” said Sen. Daniel Inouye in a statement. “We have planned this project and debated its merits for decades and we must move forward. We must set aside our differences and work together.”
Actually, the city’s participation in debate over rail has been minimal. The city has ducked almost all debate challenges and opportunities and has successfully overshadowed what little debate there has been with a multi-million dollar pro-rail misinformation campaign and the tactic of repeatedly denouncing those opposed to rail as self-interested liars.
For those under the impression that much debate over rail has taken place between the city and rail opponents, I would point out that while many words have been spoken by the city, those words have not been traded in back and forth exchange. The city rarely talks to opponents of rail, instead, they talk about them.
Successfully convincing enough of the public that NOTHING the opposition said was worthy of consideration in a highly publicized forum allowed the city to avoid answering many hard questions that could have cost the rail project much of its support .
While debate has taken place in online forums hosted by local news media, city officials have not been willing to openly participate. Because the city has been unwilling to debate rail’s merits online, most of the public has little interest in, and gives virtually no weight to the outcomes of these debates. Exposing a falsehood written by anonymous internet poster “RaiLisMansSalvation” just doesn’t get the same attention from the public that exposing a substantial untruth from the Mayor of Honolulu himself would.
So, if it wasn’t vigorous debate over the merits of rail that got us to where we are today, what did?
Here is the answer. The rail project owes its continued existence, not to the outcome of any debate, but to the Great Rail Lie. And what, you may ask, is the Great Rail Lie?
There are many variations of the Great Rail Lie, but, according to the city’s own polls, the basic multimodal message from the city to the public that has penetrated further than any other has been this:
“We must build rail because it will REDUCE, from TODAY’S LEVELS, the UNACCEPTABLE amount of time that thousands of island drivers spend trapped in RUSH HOUR traffic.”
An abundance of debate over rail’s merits never happened.
Belief in the false claim above, aka the Great Rail Lie, is what gained steel on steel rail enough votes in 2008 to bring matters to where they stand today.
But in truth, steel on steel rail did not emerge victorious in the 2008 vote–the Great Rail Lie did.
Just looking through the fiancial papers and saw that the Financial Times predicts the end of the Euro while the rates on Italina sovereign bonds are over 7% for both 2 and 10 years – an unsustainable level for sure.
So what happens to Ansaldo if the Italian government has to sell off its 30%+ interest in the parent company Finemechanica at fire sale prices?
I was just thinking of one of the bigest city blunder at the Supreme Court –
The City of New London.
Taxpayers and Property Owners became casualties of government greed, stupidity and power – the project between the City of New London, Connecticut and private corporationPzifer.
There were big talk and big ideas. When all was said and done – the 1% bullied the 99%.
http://www.youtube.com/watch?v=4N1svadJQ40 The only job creation was the demolition crew. Project has vanished due to lack of funds.
How come no one is looking at the other bidders’ licensing status?
Fresh news from the city. What planet are they living in? No matter what happens out there, the city issues its own written version.
——————————————————
Official website of the City and County of Honolulu
You are here: Main / Customer Services / Public Communications Division / 2011 / 11/29/11 HART Signs Core Systems Contract with Ansaldo
HART SIGNS CORE SYSTEMS CONTRACT WITH ANSALDO
(Tues. November 29, 2011) — After months of additional review of the contractor’s financial capacity, the Honolulu Authority for Rapid Transportation (HART) signed a contract today with Ansaldo Honolulu JV for the Honolulu rail project’s core systems.
The core systems contract with Ansaldo Honolulu JV includes the design, construction and delivery of the train vehicles, the train control systems and the operation and maintenance of the rail system after installation.
“Our extensive review of Ansaldo Honolulu JV’s finances showed that they have the capacity to successfully deliver the core systems contract,” said Toru Hamayasu, HART’s interim executive director and CEO. “We have strong safeguards in bonds and guarantees to protect us. But more importantly, I believe we selected a responsible contractor, with a solid commitment to delivering a world-class system for Honolulu.”
Honolulu Mayor Peter Carlisle said he was pleased to see the project move forward. “Rail transit will bring much-needed jobs to our community during these tough economic times. It will also provide a solid transportation option and restore quality of life for our residents who are forced to fight traffic daily, at the expense of time with their families and friends,” Carlisle said. “Rail is a green and sensible solution to our gridlocked roads and highways. It’s time to move forward and respect the people’s vote.”
HART Board Chairwoman Carrie Okinaga said having the core systems contract in place is key to successfully delivering this project. “Due diligence in assessing the contractor’s technical and financial capacity was absolutely critical,” she said. “With that lengthy review completed by the chief procurement officer, staff, consultants, and board members, and knowing that HART will continue to monitor this contract and all of our contracts diligently, we look forward to the project moving forward, with Ansaldo Honolulu JV as our partner in delivering this project on time and within budget.”
The HART board’s Finance and Project Oversight committees also conducted two separate meetings on Ansaldo’s financial capacity, and that of its parent company, Finmeccanica, in addition to eight board meeting discussions. Most recently, the committees held a lengthy public meeting Friday with Ansaldo’s top officials, who answered detailed questions about the company’s finances. At both meetings, Ansaldo officials were questioned extensively about the joint venture’s financial capacity to fulfill the contract.
“We have confirmation at three levels: the City, State DCCA, and the State court that the process was in full compliance with the procurement policies. Additionally, extensive due diligence has been conducted by HART over the last several months. We are confident that the procurement officer made a well-informed decision,” said HART Finance Committee Chairman Don Horner and Project Oversight Committee Chairman Damien Kim.
Ansaldo Honolulu JV was awarded the $1.4-billion core systems contract in March. That contract includes $574 million for the design, construction and delivery of 80 train vehicles and train control systems, and $830 million in operations and maintenance over a 14-year period. The contract calls for the delivery of the first 16 vehicles in 2014 and for the remainder in 2018.
The core system’s contract is the latest milestone for the rail project, with 50 percent of its design and construction contracts already awarded. The project officially broke ground earlier this year and utility relocation work is now in full swing in preparation for the construction of the transit guideway in February 2012. The first section of the transit system from East Kapolei to Aloha Stadium is expected to open in 2015; the second section from East Kapolei to Kalihi in 2017; and the entire system from East Kapolei to Ala Moana in 2019.
-30-
Media Contact: Scott Ishikawa, (808) 768-6172 cell: (808) 227-2350.
From the city’s Nov. 29, 2011 press release “HART SIGNS CORE SYSTEMS CONTRACT WITH ANSALDO” posted in a comment higher up in the page.
“We have confirmation at three levels: the City, State DCCA, and the State court that the process was in full compliance with the procurement policies. Additionally, extensive due diligence has been conducted by HART over the last several months. We are confident that the procurement officer made a well-informed decision,” said HART Finance Committee Chairman Don Horner and Project Oversight Committee Chairman Damien Kim.”
Well, somebody had better tell the prosecutors in Italy that they are wasting their time, the transit authority in Honolulu already investigated Finmeccanica and found that these guys are good to do business with, so they must be clean, right?
http://www.guardian.co.uk/world/2011/sep/16/arms-finmeccanica-executives-italy-bribery
“Two top executives of Britain’s second-biggest defence supplier have offered their resignations following the publication of Italian court documents claiming the group used bribery to win contracts.”
“Both men figure in court documents relating to an inquiry into the suspected blackmail of Italy’s prime minister, Silvio Berlusconi. The documents showed that police had recorded conversations involving Finmeccanica executives who, according to prosecutors, “on several occasions spoke on the telephone not only about relationships with leading personalities in the politics and armed forces of foreign countries, but also, more explicitly, of the need to pay them in order to be able to win tenders for the supply of arms [and] defence and security equipment”.
“The telephone calls demonstrated that representatives of companies in the Finmeccanica group are able to influence tender competitions held abroad by means of contacts with senior officials in the local governments to the point of overturning already decided outcomes,” they wrote.”
And one last quote from this, http://www.guardian.co.uk, article (the original is more than twice as long):
“They accused him and his wife of blackmailing Berlusconi and claimed the money was collected for them by one Valter Lavitola, editor of a small-circulation Rome newspaper for whom an arrest warrant was also issued.
Lavitola, who was abroad at the time, is still on the run.
Finmeccanica acknowledges that he combined his activities as a journalist with those of an agent for the firm. According to the judge overseeing the blackmail inquiry, Lavitola had “frequent contacts” with Finmeccanica’s commercial director.
In one wire-tapped conversation when the journalist was, by his own account, in Panama, he began discussing the payment of his commission…”
So, be on the look out for things like reporters and news executives boat shopping together. (I respect many journalists, however, at the same time, I’ve got my doubts about more than a few.) But then, this story is from September. I wonder what’s been going on since then? Let’s google the terms Finmeccanica and bribery, and see what turns up. Here’s the first result:
“News for Finmeccanica bribery
Scandal at Finmeccanica Revives Questions in Italy
New York Times – 1 hour ago
… are under way involving Finmeccanica and its subsidiaries, laying bare what prosecutors depict as a system of patronage, slush funds and bribery that …
3 related articles”
hmmm, click the link and… yes, it seems like Finmeccanica is still in the midst of a legal and financial maelstrom.
And hey look, we got mentioned,
“Just Tuesday, its Ansaldo transport units signed a $1.3 billion contract to supply technology and vehicles for a new, driverless subway system for Honolulu”
The Star-Advertiser regularly carries New York Times stories both in print and online, this story looks like a shoo-in for tomorrow’s edition, doesn’t it? Well, doesn’t it?
If it isn’t, why wouldn’t it?
Excellent find!
I have no doubt either that the Star-Advertiser will have a link to that NYT story. I mean, why wouldn’t they?
In fact, I’d expect our sole daily paper to investigate that themselves… in between printing City press releases as news and burying news unflattering to our status quo politicians.