The shutdown of rail – what does it mean?

Clearly the Honolulu Authority on Rapid Transportation (HART) is treating the shutdown as a manageable problem to be overcome. While HART has stopped earth-turning work, it presses ahead with engineering, design and the rail cars. The money is flowing out on the same premise as before, which is that if you take the project far enough, it will be unstoppable.

Next comes the Federal Court ruling and the mayoral general election. In both instances, the shutdown is likely to have an impact.

Judge Tashima

In his court day, Federal Judge Wallace Tashima seemed skeptical of the City’s most basic contentions. The simplest was the problem of segmenting the archaeology into four parts, which was exactly what bothered the Hawaii Supreme Court.

If Judge Tashima rules for the plaintiffs narrowly, he could support the Hawaii Supreme Court in its determination to see the archaeology conducted across the entire route.

If he finds more broadly for the plaintiffs, he probably would rule that the City failed to analyze the alternative modes of transit, routing and impacts. Logically this would result in shutting down all work and backing up to square one on transit solutions.

From attending the court sessions with lawyers, I have internalized the mantra, “Never speculate on a judge’s ruling based on his questions in court.” Nonetheless beneath the black robe are his trousers, which go on one leg at a time. With Rail work shut down, and with the Hawaii Supreme Court already having found fault, Judge Tashima will not be burdened with that tough step of shutting down the work himself. For that reason, I think the prospect of a ruling for the plaintiffs, which were already good, just got better. 

Cayetano v. Caldwell

 
Political slang has only two simple terms for the prospects of candidates. These are “front-runner” and “underdog.” Neither suffices here.

While the anti-rail Ben Cayetano led the primary election with 45%, Kirk Caldwell got 29% and Mayor Peter Carlisle got 25%, giving the two pro-rail candidates a combined vote of 55% to Cayetano’s 45%. This creates a situation in which neither is front-runner or underdog.

In the setup of such a runoff, two things seem most salient: the context of public opinion, which is measurable, and the stature of the candidates, which is largely intangible.

Public opinion has shifted from slightly pro-rail to substantially anti-rail. This was an astonishing change, given that HART spent a small fortune on propaganda and the construction/development industry did also. Despite the fierce attachment of the political class to rail (even Carol Fukunaga is pro-rail), underlying public opinion works in Cayetano’s favor.

With regard to the two candidates’ stature, my views as a Cayetano supporter should be scrutinized by the reader. But I contend that despite the unprecedented heat generated by rail, a significant amount of the electorate will cast their votes based on other factors, such as:  What they remember about a candidate’s prior service. Whether he makes sense talking about a broad range of questions. How well they like his wife. Who his friends are.

In this regard, it is significant that it was Carlisle, not Caldwell, who was eliminated in the primary. Although Carlisle’s devotion to rail was possibly even more single-minded than Kirk Caldwell’s, an incumbent’s voter base results from innumerable details, such as the particular pothole he fixed, the contract he let, the wedding he attended, and the night he went to so and so’s meeting in Chinatown. 

By comparison to Carlisle, Caldwell’s vote base is more simply pro-rail. His four per cent margin over Carlisle was derived from a calculation by the unions and the downtown crowd that he and not Carlisle had the best crack at stopping Cayetano. While the result is still a real battle for Cayetano, he has a better chance of picking up some of Carlisle’s voters than he would have if the Caldwell bloc had lost and more cleanly swung behind Carlisle.

The Real Carlisle

Meanwhile the real Peter Carlisle is still mayor and should be eyed more closely.  On the 2012 election night, in political tatters, he vowed as a lame duck to make the rail unstoppable. He will push and spend as he has for two years.

Imagine how differently both the rail and his political career would have played out if his approach had been, “We have to double check these worrisome cost issues. We will try to soften the visual impact a bit. If ever we disturb a Hawaiian burial, we will be respectful. We will bring in the right people. All will be pono.”

Instead he tied himself to a political/engineering scenario, about which he knew alarmingly little. Other than Cayetano, he did more for the anti-rail uprising than any of us who are against rail. No wonder he was voted out of office. 

Beneath the Simplicity

 
The surface story is that HART is respectfully complying with the shutdown. Daniel Grabauskasas, the HART CEO, took this position quickly in the aftermath of the ruling.

Things got more complicated at HART’s first board meeting after the shutdown. Member Don Horner’s numerous questions revolved around his perception that the Court ruling hung solely on the Supreme Court reinterpreting the administrative rules of the State Historic Preservation Division (SHPD).

He raised these questions, with an assist from member Ivan Lui-Kwan, in the public part of the HART meeting. The nine members then went into an hour and a half executive session, which suggests they did more than chat a bit and eat a sandwich.  Returning to public mode for a brief statement, they affirmed Grabauskas’s position but added the following: “The State and the City followed the State Historic Preservation Division’s long standing interpretation of its rules to allow the subsurface AIS work to proceed by sections. The lower court agreed with that interpretation. The Supreme Court disagreed with this interpretation and past practice.”

It seems almost inconceivable that Grabauskas jumped the gun by shutting down earth work, but reporters who watch HART were wondering. Horner dominates HART to an extraordinary degree, and he is clearly looking for a way to move the Rail work forward as soon as possible.

If Horner and Grabauskas were not explicitly at cross purposes, neither did they seem to be genuinely aligned. Grabauskas was all about respecting the Court and Horner was all about reducing the Court ruling to a quibble over an administrative rule of a notoriously feeble State agency. Of the two, who will dominate? The answer is Horner, by virtue of temperament, training and experience.

In his prior life, Horner was a Navy officer and a bank president. His skills lie in fitting large undertakings to identifiable rules. He has been working since last January on getting HART into ship shape on cost overruns, or what he refers to as drawdowns against HART’s contingency fund. It is now September, and he is lecturing the staff on organizing its information to show how much work has been contracted, in what amount, how much money has been spent, on what it was spent, and how much of the total work has been accomplished as a result.

As of the last meeting, the answers seemed to be that HART has contracted well over three billion dollars worth of work, that it has spent several hundred million dollars, and that two per cent of the construction has been completed. I’m not sure whether that was two per cent of the whole or two per cent of the first segment. I was sitting in back, and the members were not in good voice.

An Out of Control Project

The public testimony turned into a pep rally for HART. One Rail consultant said members should get out and shake more hands. Sitting in the public’s witness chair, he put in a plug for everyone to vote for Caldwell. The board quickly abandoned its published and previously rigid time limit of two minute on public testimony. One board enthusiast spoke for well over ten minutes and then threw his arms around member William “Buzz” Hong. 

As the lone dissenter in the room, I made a last-minute decision to speak up on behalf of why the project had been shut down. I was too nervous to say the meeting was out of control, which might have been taken as discourteous to the chair, but I did say in so many words that the entire project was out of control.

If Mr. Horner gets ahold of cash accounting and metrics of progress, the project he inherited from the combined efforts of Mufi Hannemann, Caldwell and Carlisle will still be out of control. The recurring reason is that the Rail started construction in the country and is building toward the city. Everyone is flying blind.

The Previously Overlooked Cultural Sites

One example is the new SHPD study describing twenty-seven previously overlooked Traditional Cultural Properties (a Federal term) along the Rail route. (See HART web site + Planning + II Traditional Cultural Properties). According to the study consultants, these sites are potentially eligible for the U.S. National Historic Register, and HART is responsible for gathering all parties of interest and pursuing the Historic Register questions. No one said how that work is coming, nor why such add-on issues were not resolved before the start of construction.

Second (I testified) is the problem of performing archaeology in Honolulu without having a completed engineering program. The reason is found in an appendix that staff pointed out to me when I last tried to communicate with HART eight months ago. (I cannot now find it, nor does the search of “construction approaches” yield anything). 

The appendix as I previously studied it showed “construction approaches” of three types. One was the single column of Ewa, which achieves rigidity in clay soil.

The second addressed the soft soils and crumbly coral shelves that underlie Honolulu. To achieve the necessary rigidity, the prescribed approach was to plant not one but two columns and join them with a girder. 

If that doesn’t work, the third approach was to build lateral supports that are tied at oblique angles to the two columns.

Where in Honolulu will these columns be?  How big will they get? Should the archaeological inventory address the first, second or third options? 

Burials as Metaphor

In other words, HART can’t cleanly do the archaeology until they do the engineering. Until they do both the archaeology and the engineering, and after that the detailed architectural design, HART doesn’t really know how much the project will cost. Until these questions are answered, HART’s cost number is only an estimate lacking in crucial information.

The most fundamental axiom of planning in the construction industry is that you can’t calculate cost until you know the design. This would be as true for a treehouse as for the building of rail.

Design/Build and Cost Overruns

It is why design/build contracts are fraught with the potential for abuse and the likelihood of cost overruns. In this regard, it is instructive to know that Kiewit Construction and Kiewit/Kobayashi are working on design/build contracts in the low-resistance areas of leeward Oahu. But the functions of designing and building have been separated in the high-resistance area, Honolulu.

Smart contractors can finesse design/build to their advantage as long as the snags are comparatively few and the contingency fund is fat. Good fortune declines as unforeseen problems spring up and the till runs dry. In the latter case, negotiating cost overruns and change orders becomes ever more of a contentious political problem.

Did you know the project already has twenty-nine change orders? I didn’t until I went to the HART meeting.

Last January HART made a headline by approving a $15 million change order to Kiewit plus an extra $4 million to cover a botched City insurance pool that was originally intended to save money. These cost overruns, as it turned out, were only for delays on overhead. The Board approved another $7.2 million for design delay, but as it turned out there are remaining design items under dispute. The much bigger one remaining is the overrun for construction.

Discussion of specific cost overruns are secret. This is because the government negotiators are not supposed to let slip how much they might ending up agreeing to.

The Government’s Negotiators

One of HART’s problems is that the government watchers are not really government watchers. They are part of the maze of consultants who are actually running the project. They include Parsons Brinckerhoff, its PB Americas subsidiary, its spinoff InfraConsult Inc., HDR Engineering Inc. (which is designing three stations and recently bought out its supervisor InfraConsult), Kiewit and its joint ventures.

Like the Italian firm Ansaldo, which has a $1.4 billion contract for the rail cars, all of these are mainland or foreign companies. When their interests are so intertwined, how do these companies credibly monitor cost overruns? Where is their long-term concern for Hawaii? That is another story.

Just as the less skilled jobs are going to local workers, only the small crumbs of contracting are going to local firms.

The one local company that appears to have a substantial deal is Albert C. Kobayashi Inc., which is partnered with Kiewit on building the $192 million facility maintenance yard. If Kobayashi has half of that contract, he has about two per cent of the total action.

Altogether HART has issued about three billion in contracts, approaching sixty per cent of the total stated budget. More of this money is going to engineering and design companies at this point than to builders. This underlines why Mr. Cayetano demanded that HART shut the entire project be down, to no avail.

The Bottom Line?

The pro-Rail interests embedded in HART act as if they are ready to go forward at any cost in dollars. I infer they basically would line up with Carlisle, who said explicitly he would build rail with or without the Federal allocation of $1.5 billion.

The archaeology is scheduled for completion in six months. If substantial burials are found, this would be extended to accommodate changes in route, design and budget. At some point, extensive change demands a new Environmental Impact Statement (EIS).

If Judge Tashima rules against HART, he said – in his delightfully understated way – that everyone will have to get back together to talk about what happens next.

If Cayetano becomes mayor, the first thing he will do is put his own Transportation Services director on the HART board. His advisers are working on what will happen after that. The unraveling will accelerate and at some point cascade. Clutching whatever is left of their reputations, the proponents will throw in the towel.