HART board to review all options as rail budget could balloon to $8 billion


The cost of rail is going higher and it will take even longer to build.

That’s the latest projection from federal officials who say the cost for Oahu’s rail project can go up to $8 billion.

The price tag has doubled since the project started in 2008, when it was estimated to cost $4 billion. In 2012, the cost went up to $5 billion, and less than a month ago, it climbed to $6.5 billion. The new finish date is in 2024, two years late.

So what does this mean for the project? Honolulu Authority for Rapid Transportation board members say there could be some drastic changes, or they will need to ask for more money.

Board members say the Federal Transit Administration’s higher projected cost is in part due to the rise in construction and labor costs, as well as other unknowns the project may face.

A spokesperson for the FTA sent KHON2 a statement saying: “… we will work with HART to ensure it is taking every reasonable measure to mitigate cost overruns and minimize the delay in opening the project.” (Read the full statement below.)

So now HART officials have to figure out if they have enough money to finish the project or make drastic changes.

“Over the next 60 to 90 days, we’re going to look at realistically how much money we have to build what kind of system, so we can make a decision whether we stop at Middle Street or do we go halfway to Ala Moana, whether we go all the way to Ala Moana, how many stations,” said HART board member Mike Formby.

“What about fewer cars?” KHON2 asked.

“That’s another option,” Formby replied. “There are many options, but first we want to figure out what we can do for the money that we expect to have.”

HART chairwoman Colleen Hanabusa says all options are on the table because federal officials are now willing to consider changes without pulling their funding.

“That’s a major change from before when they said no, we’re not going to look at anything short of what you, the City and County of Honolulu said that you were going to build,” she said.

But Hanabusa adds that any substantial savings will have to come from making changes in the guideway. Cutting down the number of stations probably won’t be enough.

She says the cost of building nine remaining stations stands at $250 million, “so when you look at that, if you’re going to try to get to some figure to finish the guideway, the stations themselves do not give us as much relief as you’d think. It’s the guideway that costs the most, so we have to look at that.”

Another option is to get more money, but Hanabusa says it seems unlikely that the state legislature will approve another extension of the general excise tax, considering lawmakers told HART not to ask for more money when they approved the extension this past session.

“Are you ruling out asking the legislature for more money or another extension?” KHON2 asked.

“We never rule out anything,” Hanabusa said. “It doesn’t mean we’re going to be successful, but I’ve always taken the position, all they can say is no when you ask.”

The H-3 Freeway faced similar cost overruns and project delays. The initial estimated cost for the 16-mile stretch of freeway in 1963 was $250 million.

When it was finally completed in 1997, it cost $1.23 billion. The delays and run-up price tag were mainly due to protests and court battles.

At the time, the H-3 Freeway was the most expensive freeway per mile in the United States.

The following statement was provided by the FTA:

The Federal Transit Administration (FTA) has conducted a risk assessment of the Honolulu Rail Project cost and schedule. While the draft risk assessment has identified a significant funding gap in the total project cost, we will work with the Honolulu Authority for Rapid Transportation (HART) to determine if revisions are required before we finalize the assessment. In addition, we will work with HART to ensure it is taking every reasonable measure to mitigate cost overruns and minimize the delay in opening the project.

The Full Funding Grant Agreement (FFGA) for the Honolulu Rail Project, signed by FTA and the City and County of Honolulu in 2012, has a total project budget of $5.1 billion, which includes $1.55 billion in FTA Capital Investment Grant program (New Starts) funds. During the past year, Hawaii state and Honolulu City Council actions have increased the non-federal funding available to support a total project budget of $6.8 billion. FTA’s draft risk assessment identifies a significant remaining funding gap beyond $6.8 billion of approximately $900 million to $1.2 billion. Keep in mind the estimated date of completion for the project is December 2024.

As stated previously, FTA has not yet released the FY2015 and FY2016 funding increments for the Honolulu rail project. Until FTA receives and approves a revised project cost estimate, schedule, and financial plan which includes a commitment of all of the local funds needed to cover that cost estimate, FTA cannot award the FY2015 or FY2016 increments of New Starts (Section 5309) funds under the terms of the Full Funding Grant Agreement.

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