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The Honolulu Advertiser


BY Greg Wiles
Advertiser Staff Writer

Posted on: Sunday, May 10, 2009

Government construction projects delayed

 •  Industry will still suffer despite push
Hawaii news photo - The Honolulu Advertiser

Jobs slow to arrive despite state, county fast-track program.

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Hawaii news photo - The Honolulu Advertiser

The Kealakaha Bridge Replacement Project on the Big Island is one of the state's capital improvement projects designed to stimulate the economy by creating construction jobs.

State of Hawai'i

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BY THE NUMBERS

Statewide Capital Improvement Projects planned

Number: 1,505*

Cost: $1.81 billion*

Projects open for bid

Number: 228

Cost: $327.8 million

Projects awarded

Number: 122

Cost: $299.8 million

Projects with construction started

Number: 109

Cost: $302.9 million

* Does not include county projects

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STILL ON THE STARTING BLOCK

The state's much-promoted effort to fast-track construction projects has hit some speed bumps, with even some marquee projects being delayed.

When it introduced the program last December, the state listed a number of projects it wanted to get under way in coming months. A number of those have been delayed or have had a late start, including:

  • The $19.8 million East Kapolei II East-West Road project was to start in January but was delayed by a bid protest.

  • A $35.7 million Windward Community College Library Learning Resource Center was originally slated to start in August. It now is listed as starting in March 2010.

  • A $7.1 million expansion of a Kona Airport parking lot didn't get under way in January as hoped.

  • The $16.8 million of improvements to the Ma'alaea Small Boat Harbor was hampered by a bid protest and didn't get under way in January.

  • Some $3.3 million of work removing debris from the Kilauea River and Wailapa Stream on Kaua'i was delayed from its March start.

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    'Ewa Beach resident Tom Berg was elated to learn in December that the long-awaited East-West Connector Road in East Kapolei would get under way in a matter of weeks as the state began accelerating construction projects.

    Five months later, Berg, who's lobbied for the project for years, is still waiting to see work start.

    "We can't afford these delays," said Berg, who said the project is sorely needed to help alleviate the area's traffic jams.

    "It is really, really bad."

    But he's not the only one waiting.

    A much-ballyhooed $1.87 billion state and county capital improvement program to pump up Hawai'i's construction industry by fast-tracking government projects is moving forward, but not as expeditiously as hoped.

    So far about one-sixth of the contracts, or $302.9 million, have started work. There has been much progress behind the scenes to start to accelerate projects, including a significant permitting accord between the state and the City and County of Honolulu.

    But for thousands of idle workers, the jobs haven't flowed fast enough.

    In March, the number of construction jobs in Hawai'i reached a 51-month low as the number of people working in the building industry fell for a fifth consecutive month.

    "We're just waiting," said Alfonso Oliver, interim business manager/president of the Laborers' International Union of North America Local 368, talking about government building projects.

    "They're coming slowly, but not as fast as we would like them."

    The construction stimulus program was announced last December after a group of local business, government and community leaders met behind closed doors to discuss the spiraling local and national economies and what could be done to stabilize the situation.

    ECONOMY HURTING

    Locally, the economy had been body-slammed by a series of high-profile business failures and layoffs, most notably the abrupt shuttering of 62-year-old Aloha Airlines. There too was a spike in energy prices, a credit crunch brought on by subprime mortgage problems and Wall Street's stunning near-collapse in the fall.

    The group met under the auspices of the Hawai'i Economic Stabilization Initiative to discuss how government money could play a role in the recovery, with capital improvement projects being a major part of it.

    Construction is one of the state's top industries and had been struggling since earlier in the year as home builders and commercial developers slowed projects and individuals cut back on home renovation and other improvements. Private building permits in the state fell about 19 percent in 2008 from 2007.

    That decline has accelerated this year, with private permits in the first three months of 2009 off by more than one-quarter compared to the first quarter last year.

    Such declines prompted the Lingle administration to follow up on the Hawai'i Economic Stabilization meeting by announcing the state's stimulus plan to hasten public infrastructure projects.

    TO CHEER ABOUT

    The state and counties, Gov. Linda Lingle said, would accelerate getting 1,521 projects worth $1.87 billion started during an 18-month period.

    Included in that were a myriad of big-dollar transportation projects, school renovations, library repairs and other projects.

    Those pronouncements had people like Berg, Oliver and Ron Taketa, Hawaii Carpenters Union financial secretary, cheering from the sidelines as projects and dollar figures were announced.

    Taketa said 44 percent of the union's 7,500 members are without work.

    "We knew it would take some time," Taketa said. "There is some lag time between when the money is appropriated and when the jobs are produced, but the sooner the better."

    Indeed, the latest numbers available for the number of unemployed construction workers show a more than doubling of people on the bench from December 2007 to December 2008.

    The jobs number is on the mind of state Comptroller Russ Saito, a no-nonsense administrator who is Lingle's point person for the capital improvement project stimulus plan.

    "The main thing we're trying to do is create jobs," said Saito. "The one thing that's driving us to do more than anything else is getting construction started."

    STEPS TO TAKE

    But quickening the state process isn't so easy. One almost needs a flow chart to figure out the more than one dozen administrative steps involved from legislative appropriation to shovel in the ground.

    The process can include an individual department's timing for the project, the department requesting budget allotments for design and construction, seeking governor approval on construction and design funds, setting up a project account at the Department of Accounting and General Services, putting design and construction work out for bid and signing a contract with the bid winner.

    The system is set up as a way to be careful and controlled in the spending of public money and not to set speed records.

    Thus, in looking an an expedited system, Lingle created a CIP Strike Force with Saito and other department representatives, meeting twice a month to chart progress and discuss issues.

    Besides pushing out millions in contracts, the group's major accomplishments include starting up Web-based tracking of all of the $1.8 billion in state government projects. Through the matrix, Saito and others can see bottlenecks and work to solve problems.

    They also worked with the City and County of Honolulu on an express permit process that allows the state to apply for and immediately receive a building permit. The accord allows the state to do so by agreeing to self-certify certain aspects of the review and inspection processes.

    SEPTEMBER GOAL

    "The City and County of Honolulu has shown some real leadership in speeding up the permitting process," said Saito.

    All of this is being done with the goal of having all $1.8 billion of projects at least out for bid by September.

    As of the end of April, construction awards had been made and 109 projects worth $302.9 million had been started. The total includes about $31.9 million started last year before the announcements of Lingle's program.

    Overall, $930.5 million of work was either out for bid, awarded or started construction at the end of April.

    There would have been more, but Saito said there are still everyday contracting problems to be expected, including getting the design work on time and protests over bid awards.

    Saito said the strike force is looking at ways to minimize time in all aspects of the process as well as tracking resolution of the bid protests. Among those projects where the award is being disputed is Berg's hoped-for East-West Connector road.

    Berg, a legislative assistant to state Rep. Kymberly Pine, R-43rd ('Ewa Beach, Iroquois Point, Pu'uloa), suggests a legislative change may be needed, allowing the governor to override bid challenges when transportation projects are involved.

    Protests and other setbacks aside, Saito and others are pushing forward with the CIP Strike Force work and hope to see the effort pick up speed.

    Saito hopes to meet the September deadline for getting all of the work in some stage of bid or award. He also hopes to take the effort a step further by working on sending another $1.2 billion in state projects into the pipeline by next summer.