How much is it going to cost to operate and maintain Honolulu’s rail system? It’s a question that’s been asked for years. We got an answer Wednesday and it’s about $69-million a year.

The city says the cost does not take into account the revenue collected from fares, but officials do not believe it will generate a lot of income in the beginning when rail services start. The Mayor is calling it good news. Finally, city officials and the public will know how much it will cost to operate and maintain the Honolulu rail system.

The city has signed a 13.25-year contract with Hitachi Rail Honolulu Joint Venture. We’ll be paying them a total of $918-million. This includes the full route from Kapolei to Ala Moana.

It averages out to about $69-million per year. With that money, Hitachi will be responsible for maintaining the facilities used to support the rail system and have workers at every station.

“It’s a cost we can cover in our budget. In fact, for the first 6 months of this coming fiscal year, we have that amount in the budget and it’s a number it’s a nut we can cover,” said Honolulu Mayor Kirk Caldwell.

Officials say it’s a deal comparable to transportation services we pay now. The annual cost to operate TheBus is up to $220-million and TheHandi-Van is close to $50-million.

“We were originally told $130 million a year from the city Department of Transportation so of course, that is substantially less, but we really need to see the details to see if any types of expenses were left out,” said City Councilwoman Kymberly Pine.

While the bulk of the cost is covered, the city mentions money needed for oversight and electricity associated with rail operations is not included in the contract. We’re told the $69-million a year expense should be reduced once they factor in the revenue from fares.

“Certainly in the near term we don’t think it will generate a lot of income for the city so we are not even counting that, so we are being more conservative in terms of how we plan to pay for this,” said Mark Garrity, former DTS Director.

There are 3 phases included in the contract:
Years 1-2, Interim Operations 1: East Kapolei to Aloha Stadium
Years 3-5, Interim Operations 2: East Kapolei to Middle Street
Years 6-13.25, Full Operations: East Kapolei to Ala Moan

The Mayor hopes a portion of the rail system will start to run at the end of the year but officials do no know exactly how many will be using the system in the first few years.