The Federal Transit Administration has given Honolulu’s troubled rail project until the end of April to submit a plan for how it plans to bridge a shortfall likely to approach $2 billion.

In a letter dated Tuesday, the FTA denied the city of Honolulu’s request to extend the deadline for the so-called recovery plan until the end of June. At the same time, the FTA did not hold the city to the original deadline of the end of this month, which would have been difficult to meet.

HART Rail guideway near Aiea cemetery. 15 nov 2016
A rail guideway under construction near Aiea cemetery. Cory Lum/Civil Beat

In September, the Honolulu Authority for Rapid Transportation sent the FTA an interim recovery plan that officials hoped would buy time to develop a full-blown alternative.

City and HART officials hope to persuade the Legislature to extend a Honolulu surcharge of the state general excise tax to complete the 20-mile, 21-station rail line as originally planned, from East Kapolei to the Ala Moana Center. They also could pursue other funding sources.

Last week, HART revealed that the cost of the project, under one scenario, could reach $9.5 billion. It was the latest in a series of rising cost estimates. When the city signed a funding agreement with the FTA in 2012, the cost was pegged at $5.2 billion, which itself was considerably higher than earlier estimates.

The final cost will depend heavily on how much the project has to spend on financing.

HART estimates the cost of construction, minus interest charges, to be about $8.2 billion. Depending on financing costs, that leaves the project with a shortfall of between $1.4 billion and $2.3 billion.

The interim plan submitted in September included two broad alternatives. One would involve raising the money to complete the project to the Ala Moana Center. The second would defer some stations and other elements of the project, but not pare it back so much that the federal government would withdraw its support of $1.55 billion.

In the FTA letter, regional administrator Leslie Rogers acknowledges the city’s desire to find enough money to build the project as first envisioned, but urges officials to continue to work of the “Plan B” for a scaled-back system that would end at a Downtown Station. This would involve a detailed cost and schedule analysis and ridership studies, and looking at ways to save money.

The city should hold off on any actions that would limit its options, Rogers wrote.

“We appreciate the many challenges HART has faced in the design and construction of the Project,” he wrote. He pointed to recent progress, such as the hiring of an interim director, Krishniah Murthy, and arranging for a peer review of the project by industry experts.

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