In Government, News & Updates

In a recent article by Construction Dive, partner Mitch Bierman discusses Honolulu’s recent decision to withdraw the city from participation in a public-private partnership (P3) for the $9 billion Honolulu Rail project. The city was a joint partner in the procurement with The Honolulu Authority for Rapid Transportation, which still has to decide whether to cancel the P3.

There were also concerns raised about mismanagement of the project from state auditors. Mitch said, “It may not be such a big hassle.”

“On the government side of a P3 procurement, there has to be a great deal of specificity in terms of what will be expected from vendors so that it will be able to properly gauge performance. If the specifications were presented to vendors in adequate detail, it could be just a matter of pulling out the unwanted elements such as design, operations or maintenance,” he explained.

Furthermore, “It would be more difficult to exit a P3 if the project was underway, because the vendors typically make a big upfront capital investment and have the opportunity to amortize that investment over a long period of time.”

Read the full article, here.

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