HONOLULU (HawaiiNewsNow) - Perhaps the whole thing comes down to honor. The city gave its word when it picked Ansaldo Honolulu Joint Venture and despite pressure the interim executive director isn't breaking his promise.
The Honolulu rail board heard testimony from residents and received a new letter from the city council urging a delay in signing the transit's core systems contract. This as Ansaldo Honolulu's parent company Finmeccanica announced a billion dollar loss last quarter and plans to sell off more than a billion dollars in assets. It's also partially owned by the Italian government which is facing default.
"The truth of the matter is that's the parent company. We're not having the contract with the parent company. We're going to have the contract with Ansaldo Honolulu Joint Venture," said Toru Hamayasu, Honolulu Authority for Rapid Transportation Interim Executive Director.
Still the financial concerns appear to be picking up speed.
"I guess what I'm trying to say is I think we should be a little more precautionary in terms of how we execute and when we execute and I would feel a lot more comfortable if we had more guarantees if you ask me," said Bobby Bunda, HART Board Member who is also an insurance executive. "To me right now in light of what's happening I think we should have more than the standard basic things in terms of guarantees."
Sumitomo Corporation, which is one of the two companies that lost out on the contract, says the only way for everyone with the city to sleep well is to cover the entire risk, to have Ansaldo put its money where its mouth is.
"The time for questions has come and gone. The city needs to ask for a 100 percent guarantee. The $360 million bond is insufficient. HART needs to require Finmeccanica and Ansaldo to put up the difference in an escrow account regardless of whether the company is sold. That is not an unusual industry request," said Gino Antoniello, Sumitomo Corporation Vice President.
The HART board did hear from city councilmember Breene Harimoto, who said the board has done due diligence and is against any delays with the contract.
"If we have any delays in this project, my personal belief is that it will be the end of rail. Any delay will be fatal. The train has left the station so to speak," said Harimoto.
So why is the city sticking with Ansaldo?
"I'm not a supporter of Ansaldo. I am a supporter of the process where we reached Ansaldo as the provider of the best value," said Hamayasu.
"And you still believe they are the best company to go with?"
"It's not the best company, our evaluation shows that they are the company that provides the best value to the city," responded Hamayasu.
Ansaldo executives wrote an editorial in the Star Advertiser today giving its word it is the best for the job. And really there is nothing keeping the city from signing the contract except its word in return.
"There is a certain, I guess obligation, trust thing that we've come this far so we're supposed to do our best to do the contract, but no we're not required in any way to execute the contract," said Hamayasu.
Hamayasu says the city will do a new financial check with the recent earnings report. The board will meet again next Friday November 25, which is the last day to sign the contract. If they don't find any problems they'll sign the contract that day.