WASHINGTON — The independent engineering consultant required by the Federal Transit Administration to perform due diligence on Honolulu rail says in a new report that the project’s cost estimate, risk and contingency are all reasonable and worthy of a federal funding guarantee.

The 63-page readiness report was produced by the Project Management Oversight Contractor, St. Louis-based Jacobs Engineering Group, and provided to Civil Beat Wednesday afternoon. It can be viewed in full at the bottom of this article.

“The PMOC has determined that the grantee has completed the following steps necessary to execute an FFGA: adequately defined the Project’s scope, schedule, and cost; developed an approvable PMP and supporting documents; and, has demonstrated sufficient technical capacity and capability,” the report’s executive summary conclusion reads. “The PMOC recommends that the FTA execute an FFGA with the grantee” that identifies a $5.12 billion budget and Jan. 31, 2020, revenue service date.

The FTA is still reviewing Honolulu’s Full Funding Grant Agreement application, and has said it expects to sign the FFGA before the end of the year. That’s an important deadline; the project’s federal funding eligibility will expire if the Dec. 31 deadline is missed.

Honolulu Authority for Rapid Transportation CEO Dan Grabauskas said the process was delayed from his original projected timeline by the Hawaii Supreme Court ruling that the city should have completed its burial survey for the entire 20-mile line before starting any construction. A reconsideration request has since been rejected, and work on the project has been halted, at least temporarily.

The PMOC report acknowledges the impacts of the ruling, noting that the city’s preliminary analysis is that the delay could cost between $64 million and $95 million just on three existing contracts, not including additional cost increases from escalation for future contracts.

HART has closely guarded these numbers, and agency officials have dodged multiple attempts by the media to find out this information. This includes two attempts by Civil Beat to get those figures within the past week.

The city’s schedule analysis in the PMOC report is that “there could be a nine to twelve-month impact on the interim opening but possibly no impact to the full Revenue Service Date.”

But there’s little further analysis beyond that; the PMOC says in the report it “will perform a thorough review of HART’s assessment … to determine the overall magnitude of impacts to the project schedule and project budget.”

The most significant change the PMOC recommends in the report is an increase of $29 million to the project’s cost — $15 million for adjustments for “contractor markups” and $14 million to add to the contingency.

That second addition hints at a significant concern the PMOC had — that Honolulu has drawn down on its contingency too fast, from $866 million during the prior review when HART asked to enter into the final design stage to $644 million now, a difference of $222 million.

“It is observed that significant contingency reduction occurred since the recent prior risk review, to a point where contingency is below accepted control levels,” the report says. It says the project’s Risk and Contingency Management Plan as currently designed contains $106 million in “secondary mitigation measures” but should increase those precautions closer to $149 million before an FFGA is signed.

That Risk and Contingency Management Plan is the only subsection of the Project Management Plan not yet deemed “acceptable for FFGA.” Eighteen other subsections got the thumbs up.

The next step for the funding application would be for the FTA to submit it to U.S. Department of Transportation leadership and the White House’s Office of Management and Budget for further review.

Read the full October 2012 readiness report here:

About the Author