Despite the political rhetoric surrounding Honolulu’s rail project, all that is certain when it comes to the final price tag: Nobody will know the ultimate cost until at least next January and it could exceed the current $6.6 billion estimate.
That was the message from the head of Honolulu Authority for Rapid Transportation, Dan Grabauskas, when he appeared before the City Council Budget Committee on Wednesday to defend his agency — and himself — against criticisms contained in an audit released April 15.
Committee members spent nearly two hours listening to City Auditor Edwin Young and Grabauskas, HART’s executive director and CEO, talk about the audit, with Young summarizing the findings and Grabauskas explaining why he thought there were some inaccuracies and misrepresentations.
HART Executive Director and CEO Dan Grabauskas says it will take time to know the true cost of rail.
Cory Lum/Civil Beat
Among other things, the audit criticized the reliability of HART’s financial plans and project management, as well as outdated plans for operating and maintaining the system once trains begin running along the 20-mile system, which will stretch from East Kapolei to Ala Moana.
But compared to his performance at a press conference two weeks ago, when he described the audit as a “mess” and accused Young of being unprofessional, Grabauskas’s appearance before the budget committee was more conciliatory. He apologized for being “a little bit passionate” when he appeared before reporters.
“The audit reinforced that we have significant risks to the project that can drive up our prices and we’ve been saying that consistently for quite a long time,’’ Grabauskas said.
“We can always do better; we can always improve things,” he told council members, acknowledging that he agreed with some of the audit’s conclusions.
The primary factors driving HART’s spiraling expenses, Grabauskas explained, were skyrocketing construction costs in Honolulu that could not have been predicted four years ago, when the project’s first budget was prepared, and the unexpected costs of relocating electrical utilities.
In October HART updated its finances, adding an additional $70 million for utility relocations and $539 million in additional contingency funds. At the same time, HART estimated construction costs on Oahu had increased between 12 and 15 percent in 2015.
The upcoming bids on the project’s airport and city center segments, Grabauskas said, “will make or break the current budget. … We will no longer be estimating or guesstimating.”
HART expects to announce one of the bid results in June, and the other later in the year.
Once those contracts are awarded, HART will be able to work with the Federal Transit Administration in crafting a final budget that Grabauskas said would be completed by the end of the year.
Honolulu City Council Member Carol Fukunaga listens to testimony.
Cory Lum/Civil Beat
“Sorry to hear that,” Councilwoman Carol Fukunaga told Grabauskas, “because ‘we won’t know until next year,’ is horrible.”
Grabauskas also assured the committee that HART was addressing the operation and maintenance issues discussed in Young’s audit, but warned council members that substantial subsidies from the city would be required.
“HART is not the source of subsidy,” he said. “Subsidy is a community conversation.”
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