Tuesday, December 6, 2011

HART: Ansaldo Contract Oversight Is Top Priority; LTE Forum: ‘Free’ Bus Service Isn’t Really ‘Free’

Recent financial losses by Finmeccanica, the parent company of the joint venture that will supply cars and operate/maintain Honolulu’s rail system, are not a threat to the viability of the project.

That's the message delivered this morning on KIPO's "The Conversation" public radio show by Toru Hamayasu (at right), interim executive director of the Honolulu Authority for Rapid Transportation.

Despite large losses in the past year (about $480 million over the past nine months), the corporation is large enough to absorb it without causing problems for the Honolulu project, Hamayasu said. “It’s not that we’re not concerned, but we’re confident the company can do the job…,” Hamayasu said (paraphrased).
“When you look at the company that makes the train control system (Ansaldo STS), that company has been profitable and its financial standing is good. It’s responsible for about 85 percent of the entire contract. Ansaldo Breda (the car supplier) has had some financial problems, but it is responsible for only 15 percent of the contract.”
Hamayasu said the city has a “huge responsibility” to monitor the situation and that if anything were to happen to threaten performance under the contract, the city would catch it. Also, he said the city has secured bonding sufficient to cover all obligations under the Ansaldo Honolulu JV contract.

LTE Forum
Today’s rail-related letter in the morning paper (subscription) examines one slice of our observation two days ago – that providing free bus service would not result in open-road traffic-free travel on our streets and highways. The Kailua resident makes the valuable point that "free" bus services are anything but free and must be paid by somebody.

Someone must pay for ‘free’ bus rides (Star-Advertiser, 12/6)
“In response to (a 11/4 letter), it sounds like a nice idea to make the bus ‘free,’ but it’s not logical…. You can’t make TheBus ‘free’ because the money has to come from somewhere, which is from taxes… Everything comes at a cost. We don’t need the government to spend more in ‘public goods’ and increase its debt.”

We differ with the writer on the last point. Government debt is justified when it implements essential services for the public. Honolulu rail will be an invaluable contribution to the city’s infrastructure and a “public good.”

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