'Gross incompetence or worse’: Rail purchase of reinforced steel questioned

Rail authority paid multi-million dollar change order for steel it had already ordered

HONOLULU (HawaiiNewsNow) - The federal grand jury investigating the rail project is looking into how the rail authority spent millions of dollars to buy reinforced steel, Hawaii News Now has learned.

Documents show that a change order for $2.85 million was paid in 2013 to contractor Kiewit Infrastructure West Co. for nearly five million pounds of rebar that was ordered and installed by subcontractor CMC Metals.

In its justification documents, Kiewit said the cost of steel “experienced significant escalation” during the project’s 22-month delay in 2010.

But a six-year-old internal Honolulu Authority for Rapid Transportation document recently subpoenaed by the grand jury implies that a lot of the rebar was already “purchased and on island.”

“(This) makes it look as though HART paid nearly $3 million to cover the cost increase of steel that had already been purchased and sitting here on island," said Randy Roth, rail critic and retired University of Hawaii law professor.

“If that’s indeed what happened, that’s either was gross incompetence or worse."

The rail authority said in a statement that the cost increases also included labor, transportation and installation costs, which were all affected by the delay.

HART added that it did not pay inflated prices for rebar that its subcontractor purchased at lower prices in 2009 and stored here.

The change order is one of hundreds of HART transactions under review by federal authorities.

It’s all part of a broad investigation into the 20-mile project, whose costs have soared from $5.1 billion to $9.2 billion.

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