City Wavering On Railcar Contract Pick?

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The Honolulu Rapid Transit Authority has asked a losing bidder for the $1.4 billion railcar contract to keep its bid alive while concerns about the apparent winner’s financial soundness are explored.

The city selected an Italian-owned firm, Ansaldo Honolulu Joint Venture, to supply and maintain railcars on the planned 20-mile elevated raid transit line to run from Kapolei to central Honolulu.


During appeals of that decision by two losing bidders, news surfaced of serious financial problems besetting Ansaldobreda SpA, one of the partners in the Honolulu joint venture.

HART, the city’s rail authority, has now asked losing bidder Sumitomo Corp. of America, to extend the terms of its railcar offer while Ansaldo’s financial situation is examined.

Sumitomo official Gino Antoniello said in a letter to HART this week his company would keep its offer open and warned the city that Ansaldo “is not a going concern at the present time.”

The firm’s parent company, Finmeccanica, recently announced that it may try to sell the subsidiary by the end of the year because of recurrent financial problems.

Antoniello said the issue of Ansaldo’s finances “cannot be ignored.”

“We believe one of the most important issues for HART to consider is Finmeccanica’s and AnsaldoBreda’s serious financial problems.,” Antoniello wrote.

He told HART that the issue “has been further exacerbated by the public statements of Ansaldo’s parent company Finemeccanica, that its rolling stock business is suffering from significant losses due to performance issues from a number of contracts and that AnsaldoBreda needs to be ‘heavily restructured and repositioned.’”

Sumitomo and the third  railcar bidder, Bombardier Transportation (Holdings) U.S.A., lost administrative appeals of Ansaldo’s contract award.

Bombardier has filed further appeals to state court and to the Federal Transit Administration.

Sumitomo did not go that route, but is protesting to the state Contractor’s Licensing Board on the grounds that Ansaldo was not properly licensed when it bid for the massive contract.

Ansaldo’s financial statements filed with the city before the contract slection

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were completely redacted before being made available for public inspection.

The parent company, Finmeccanica, has had business reversals of its own, due in part to its business dealings in Libya, now torn by a bloody civil uprising that has deposed longtime leader Moammar Gadhafi.

Finmeccanica has contracts to sell helicopters and railway parts to Libya. And the Libyan government owns two per cent of Finmeccanica’s outstanding shares.





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