Honolulu Rail Authority Countersues Skyline Contractor for Millions in Damages

In an escalating legal battle over Honolulu’s troubled rail project, the Honolulu Authority for Rapid Transportation (HART) has filed a counterclaim against Hitachi, the contractor operating the city’s Skyline rail system, seeking millions in damages and alleging fraudulent practices.

The counterclaim comes in response to Hitachi’s November 17 lawsuit, the company’s second legal action against HART, in which the contractor demands $324 million in compensation for delays it attributes to HART’s “gross mismanagement” of the project.

HART’s legal filing strikes back with serious allegations, claiming Hitachi deliberately manipulated its own schedules and submitted false and misleading information to the transit authority. Under Hawaii’s False Claims Act, HART asserts it is entitled to triple damages and additional civil penalties, potentially turning this into a multi-million dollar dispute.

According to a HART spokesperson, the agency believes it should recover more than $20 million in liquidated damages specifically for project delays it alleges were caused by Hitachi. The triple damages provision under Hawaii’s False Claims statute would significantly increase this amount if HART prevails in court.

“HART’s claim here is based on Hitachi knowingly submitting false and/or misleading information to HART for Hitachi’s $320M claim,” the spokesperson explained, clarifying that the triple damages would apply to HART’s claims against Hitachi, not to Hitachi’s claims against the transit authority.

The legal conflict has been brewing for some time. Hitachi’s first lawsuit against HART was previously dismissed by the court because the contractor failed to submit its claims to HART before initiating litigation, a required procedural step.

Following that dismissal, HART’s contracting officer, Lori Kahikina, issued a comprehensive 64-page decision on November 14 addressing each of Hitachi’s claims. In her assessment, Kahikina rejected the majority of Hitachi’s claims, declaring them unsubstantiated. More seriously, she determined that Hitachi had manipulated its schedules to conceal its own delays and shift blame to HART.

Honolulu’s rail project, officially known as the Skyline, has been plagued by controversies, delays, and cost overruns since its inception. Originally estimated at $5.2 billion in 2012, the project’s budget has ballooned to over $10 billion, making it one of the most expensive rail projects per capita in the United States.

The 20-mile elevated rail line is designed to connect East Kapolei with the Ala Moana Center, providing a transportation alternative for residents and tourists on an island struggling with some of the nation’s worst traffic congestion. The first segment of the rail line opened to the public in June 2023, after years of delays.

Industry experts note that disputes between transit authorities and contractors are not uncommon in major infrastructure projects, but the scale and public nature of this conflict highlight the challenges facing Honolulu’s ambitious rail system.

The legal battle between HART and Hitachi comes at a critical time for public transportation projects nationwide, as cities grapple with funding challenges, rising construction costs, and increased scrutiny of major infrastructure investments. The outcome of this case could have implications not only for Honolulu’s transit future but also for how other municipalities structure and manage their contracts with major transportation system operators.

As the legal proceedings continue, Honolulu residents are left wondering about the ultimate impact on the rail system that has been promised as a solution to the island’s transportation woes for more than a decade.