Nine years ago I wrote an essay for a local newspaper about plans to build rail in Honolulu.

My main question was, “What can the citizens and politicians of Oahu learn from previous mega-(construction) projects” in Hawaii and the world.

And my main claim was that “in all too many cases, huge infrastructure projects involve: 1) calamitous cost overruns; 2) overlooked and ignored environmental problems; 3) exaggerated development effects; 4) misleading cost-benefit calculations; and 5) the violation of established practices of good governance, transparency, and public participation in decision-making.” 

Honolulu’s rail project is now massively over budget. The most recent cost projection of $8 billion is $1 billion more than the estimate of just one month earlier. If rail is not stopped or significantly curtailed, its final cost will almost certainly exceed $10 billion. Honolulu rail is well on its way to becoming, per capita, the most expensive transit project in American history.

Honolulu's rail project is estimated to cost $6.6 billion, of which $1.55 billion is expected to come from the federal government.

Honolulu’s rail project is massively over budget.

Cory Lum/CIvil Beat

Honolulu’s runaway rail project will also result in tax increases and commitments that will strangle other public investments in this state’s crumbling infrastructure. Consider higher education. The University of Hawaii Manoa is surely one of the most dilapidated campuses in America. One-billion dollars is twice as much as UH’s entire 10-campus system needs to fix everything on its long list of backlogged maintenance and repairs.

Many observers wonder why the real cost of rail has been repeatedly underestimated – and by huge amounts. The answer is that understating costs, fudging facts, and obfuscating inconvenient truths has served the political and private interests that are benefiting most from rail.

In recent months supporters of rail have claimed that issues related to utility-line clearance are the main driver of rail’s ballooning budget. The truth is more troubling. In 2009, project consultants with Parsons Brinkerhoff (an engineering firm which has been awarded half a billion dollars in rail contracts) downplayed and ignored repeated warnings from Hawaiian Electric Co. about utility clearance issues. By the time taxpayers learned that Parsons had made reckless assurances, miles of track had already been laid.

Couples commit this fallacy when they refuse to leave a lousy film before it ends (“We paid $20 for these tickets!”). And the United States committed a much grander version of it during the Vietnam War (“Giving up would mean our soldiers died in vain.”).

Despite the tsunami of bad news about rail, some leaders who once opposed this project have come to conclude that construction is so far along that it must be completed. Former City Councilman and U.S. Rep. Charles Djou, who will challenge Mayor Kirk Caldwell, and former Mayor Peter Carlisle in the 2016 mayoral election, long opposed rail but now seems to see some form of it as a fait accompli. (Caldwell and Carlisle are proponents of rail who have repeatedly obscured budget realities with empty platitudes and phony promises – as did Mufi Hannemann, their predecessor in Honolulu Hale.)

And former governor Ben Cayetano apparently has undergone a similar conversion. For years he led local resistance to rail and criticized lowball cost estimates that Hannemann, Caldwell, Carlisle and construction interests manufactured in order to win voter approval. As reported by the New York Times, Cayetano now says “It’s gotten to the point where even I don’t recommend walking away from it.”

But to view rail in terms of costs already incurred is to commit the fallacy of sunk costs. A sunk cost is a cost that has been paid and cannot be recovered. In many areas of life and policy, decision-makers become preoccupied with sunk costs when they would be better off forgetting them. Couples commit this fallacy when they refuse to leave a lousy film before it ends (“We paid $20 for these tickets!”). And the United States committed a much grander version of it during the Vietnam War (“Giving up would mean our soldiers died in vain.”).

The sunk cost fallacy is most dangerous when people have invested a lot of time, money, and energy in something. The larger the sunk costs, the stronger the urge to continue. With respect to Honolulu rail, this urge must be recognized and resisted.

Local rail leaders have until Aug. 7 to tell federal transit officials what they plan to do about Honolulu’s runaway rail project. The first step forward is forgetting about the costs already incurred. The critical questions concern future costs and benefits.

On Thursday, Honolulu Mayor Kirk Caldwell announced that he supports ending the rail project at Middle Street, five miles short of the planned terminus at Ala Moana Center – until the city has sufficient money to extend rail all the way to Ala Moana.

HART Train stop decal on train no1. 2 may 2016.

On board HART Train Number 1 with Ala Moana Center and Kakaako as designated stations.

Cory Lum/Civil Beat

It is hard to know what to make of this about-face. Perhaps the monstrous cost overruns have become too big even for even Caldwell and his pro-rail cadre to ignore. Or perhaps they are just buying time until the Federal Transit Administration provides the approval the city needs in order to retain $1.55 billion in federal funding – an amount that Caldwell himself has repeatedly said is totally inadequate to finish rail right.

After FTA approval is obtained, there is every reason to expect Caldwell and other rail zealots to go back to pushing for rail to go all the way to Ala Moana, and beyond. And there is every reason to expect the cost of rail to climb higher and higher.

Of course, there will be a perverse rationality in a renewed push for rail to go farther, for who in their right mind really believes in a project that ends five miles outside Honolulu’s urban core? The Middle Street plan is as useful as a screen door on a submarine.

Honolulu rail has long been rolling toward fiscal disaster. Now, for a little while, it will decelerate, as local leaders say they want to cut the project back to a scale that this state can actually afford. But be assured: This project will regain momentum, and after the present fiscal crisis passes, other crises will come.

So I end with three conclusions: 1) Common sense says we do not need a rail project that ends at Middle Street. 2) A decent regard for reality leads to the conclusion that we cannot afford a rail project that goes where it should. 3) And recognition of the sunk cost fallacy counsels that we should walk away from this colossal mistake now.

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