HONOLULU (AP) - A state appeals court is upholding Honolulu's handling of a half-billion dollar contract for the construction of a commuter rail line.

The Honolulu Authority for Rapid Transportation said Wednesday the Intermediate Court of Appeals affirmed the city's decision to disqualify 1 of the bidders, Bombadier Transportation USA, Inc.

The city last year awarded Ansaldo Honolulu a $574 million contract to build rails cars and an operating system. Ansaldo will also operate and maintain the trains after the rail line is built.

HART CEO Dan Grabauskas says the city's contract award has been upheld by state Department of Commerce and Consumer Affairs, a state Circuit Court, and the state Intermediate Court of Appeals.

Ansaldo Honolulu is a unit of the Italian construction and engineering company Finmeccanica.

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