HONOLULU- The signing of a $1.4 billion contract to build and operate Honolulu’s $5.3 billion rail system has been delayed until sometime next week.
Ansaldo STS, a company based in Genoa, Italy, won the bid to design, build and operate trains that will run on a twenty mile elevated track from East Kapolei to Ala Moana.
On Friday, board members with the Honolulu Authority for Rapid Transit held an informational briefing where Ansaldo STS Chief Executive Officer Sergio De Luca testified about the financial health of his company.
De Luca said Ansaldo STS, which bills itself as an international leader in signaling and rail transport systems, has no outstanding debt and is ready to fulfill the HART contract on time and on budget.
“We have spent many months in planning the HART system and we are fully ready to immediately get to work to honor our commitment,” said De Luca, who took the unusual step of traveling from Italy to attend Friday’s meeting.
The $1.4 billion core systems contract for Honolulu’s rail transit project is a joint venture between ansaldo STS and Ansaldo Breda, which operates under a general partnership known as Ansaldo Honolulu JV.
Ansaldo Breda, charged with building 80 rail cars for the system, is 100 percent owned by Italian defense company Finmeccanica. Earlier this month Finmeccanica reported third quarter loses of $429 million and announced plans to sell $1.4 billion in assets as it looks to reorganize its business model.
“All the financial obligation of Breda will be honored by Finmeccanica,” De Luca said during the briefing.
However Finmeccanica also has a 40 percent stake in Ansaldo STS, which has been publicly traded on the Milan Stock Exchange since March of 2006.
De Luca told reporters the current debt crisis that continues to cause turmoil in Italy and other cash strapped European nations would have little impact on Ansaldo STS.
“There is no matter regarding this situation in this [sic] critical countries,” said De Luca.
HART Finance Committee Chairman Don Horner said he was satisfied with the thoroughness of the financial review presented by De Luca.
“As chair I’m confident that the process is sound and I think the questions that we had have been answered today.”
Toru Hamayasu, HART’s interim executive director and the project’s chief procurement officer, said the decision whether to move forward with the Ansaldo STS contract would be his alone.
“As chief procurement officer…all the responsibility rests on me,” he said.
Hamayasu said a check of ten other rail projects involving Ansaldo STS all came back positive, with no one attached to those projects saying they would be hesitant to do repeat business with the Italian company.
Ansaldo STS has secured $722 million in performance and labor and material bonds backed by Finmeccanica as part of the pending contract with HART. The bonds would guarantee work on the rail project is finished should the company encounter financial difficulties.
Register to log on and leave a comment
Have a news tip? Contact Andrew Pereira at 368-7273. Follow Andrew on Twitter at Khon_Reporter or on Facebook at www.facebook.com/AndrewPereiraKhon2
See the original article at: KHON2 Local News
