But the final cost is heavily dependent on how much and how long the project has to borrow, the report said. The updated estimates released Friday puts the costs of the project without finance charges at $8.2 billion.
“The rising cost projections continue to be a major concern but we need accurate, updated information to make decisions about how to pay for the project that the voters supported,” Honolulu City Council Chair Ernie Martin said in a prepared statement.
In September, HART increased its cost estimate for the 20-mile, 21-station rail line to $8.6 billion, including financing costs, leaving a shortfall of about $1.8 billion. The rail line would go from East Kapolei to the Ala Moana Center.
In 2012, when the city and the Federal Transit Administration signed a funding agreement, the cost was pegged at $5.2 billion. Even that number was considerably higher than estimates when the project had been put to voters.
The latest estimate is part of an updated assessment of construction and operating costs submitted to the FTA as part of HART’s recovery plan for how it will finish a rail project despite the funding shortfall. The city and HART have asked the FTA to give them until the middle of 2017 to complete the recovery plan, which originally was supposed to be submitted by the end of this year.
Officials are expected to ask the Legislature to approve an extension of a Honolulu city and county surcharge on the state’s general excise tax, which is currently slated to end in 2027, to cover the shortfall. But other funding options could also come into play.
The new estimate includes a 20 percent bump for cost overruns.
The updated assessment also looks at the costs of operating the rail line once it opens.
In 2012, officials estimated that the annual subsidy required to run rail, along with existing bus and Handi-Van lines, would be $307 million in the first year of operation, which was then expected to be 2020, rising to $370 million by 2026. The new assessment puts that annual subsidy between $398 million and $406 million in 2026, the new first year of operation. Voters in November approved a charter amendment that transfers oversight of operation and maintenance of rail from HART to the city, effective next July.
For rail alone, annual operating and maintenance costs did not change much in the new report. In 2012, they were expected to be $106 million. Now, that figure is $104.9 million.
The 2012 report estimated that, 258,000 trips would be made on linked bus and rail lines in the first year of service and 280,000 ten years later. The updated estimates assume 279,000 trips in the first year, rising to 313,000 a decade later.
Read the updated financial report here:
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