A federal oversight contractor is blasting Honolulu’s rail project, calling it “alarming” and “not sufficient.”

A new review looked at the rising cost of building the rail system, putting the project at $500 million to $600 million over-budget.

It also criticizes Honolulu Authority for Rapid Transportation, which oversees the project, saying its effort to contain costs has been minimal and is alarming.

The report was put together by the Project Management Oversight Contractor, which monitors large projects to make sure they’re progressing in time, within budget, and in accord with approved plans and specifications. It is then sent to the Federal Transportation Administration for review.

Dan Grabauskas, HART’s executive director, commented on the gravity of the report, saying it’s “…meant to hold our feet to the fire regarding project costs, and we take the FTA’s comments very seriously.”

The report points out that that the general excise tax collections have fallen short by nearly $41 million and there is concern that the current estimated contingency is not sufficient.

“Any time you see the word alarming in a report, it is alarming absolutely and it is cause for concern and I think HART is doing their best right now,” said Honolulu City Council member Joey Manahan.

Critics are also puzzled by some of HART’s cost-cutting efforts, such as contracting out in smaller sections rather than bundling.

“When you have construction that is duplicable, the Costco technique works–bundling them so multiple miles, multiple stations all together for the best possible bottom line cost,” said University of Hawaii engineering professor Panos Prevedouros.

But a HART spokesman says this strategy will allow smaller companies to bid and will give them more time to do it, using less manpower which ultimately lowers the cost.

The report also has concerns with delays in construction. The Farrington Highway contract is about three months behind schedule with about one mile of the guideway has already been built. The Kamehameha Highway guideway is about seven months behind.

Prevedouros says delays always mean added costs. HART says it was caused by the lawsuits and unavoidable.

The report adds that HART received a schedule from the contractor to speed things up but that was rejected. In a statement, Grabauskas said, “We are repackaging and reworking the remaining bids for the project… We are also looking at public-private partnerships to make the most of opportunities at and near our stations.”

HART is expected to send the FTA a master project schedule by the end of the month, which revises how the remaining contracts are sent out.PMOC December Report (FINAL)