- Special Projects
The Honolulu Authority for Rapid Transportation, Oahu’s rail builder, has adopted a new way of financing that, it says, will get us out of the mess of paying for the final and most complicated section of the route through the narrow, crowded, full-of-logistical-surprises stretch from Middle Street to Ala Moana Shopping Center.
That HART plan is a public-private partnership, also known as P3.
Well, good luck with that. They’re gonna need it.
Calls for P3s are often desperate happy-talk cries for help from politicians in deep doo-doo with their constituents.
“Desperate” sure describes the fix Honolulu’s rail people are in.
Still, P3s can work — under the right circumstances. Can a P3 be the answer for rail?
Maybe. But there are really compelling, basic reasons to think not.
These reasons have to do with power and negotiations. In the process of negotiating a P3 with a developer, the two sides are extremely unequal with HART being the weaker party by far.
According to the proposed plan, the developer will finance, design and build the rest of the route and also operate and maintain the entire rail system from Kapolei to Ala Moana for 30 years, during which time the city will pay the developers for operating the rail system.
The fiscal and political situation HART finds itself in makes it red meat for any developer interested in being part of the P3. The agency needs a P3 desperately more than a potential partner needs the rail job.
HART comes to the table with six publicly known weaknesses. Together, they take away most of HART’s leverage while giving the other side a huge, soft target of opportunity.
• First, rail is under great time pressure from the feds, as well as the general public, to get the job done.
“Just smear the lipstick on that pig already and be done with it” has become a weird but more or less holding political consensus.
• Second, it appears that the feds are getting so tired of HART’s delays and non-responses that they are about as close to setting a firm deadline as any government organization whose job is to give away money is likely ever to be.
How savvy does the other negotiating party have to be in order to figure out that it has the public officials over a barrel — the wolf to the lamb, the mongoose to the bird’s egg?
• Third, there are no other politically feasible state or local funding sources. None. If the mayor tries to ask the Legislature for more bucks, he should be prepared to see a big “Bite Me!” sign hanging from the Capitol rotunda on the first day of the next session.
And an increase in Oahu property tax to pay for it? That’s the mayor’s threat, but also his political nightmare.
Looked at another way, this might actually represent one of the city’s few bargaining chips: the fact that there’s a certain amount of money available for the private partner, so take it or leave it.
Unfortunately, “take it or leave it” works best when it comes from a position of strength.
• Fourth, whether or not this HART board and this HART CEO are better than the previous ones, HART is essentially an organization with a bad history that is moving with no experience into uncharted territory.
• Fifth, in the past, HART’s agreements have too often been a combination of vagueness and magical thinking that have come back to bite us in the — to use a rail term — caboose. There has been a disconcerting amount of this when it comes to the city’s relationship with the unhappy builder of the rail project’s trains and nerve center, Ansaldo Honolulu.
• Sixth, Ansaldo is already locked in a dispute with HART over construction delays, and the company appears to have been promised a key role in operating rail. Whoops.
So how savvy does the other negotiating party have to be in order to figure out that it has the public officials over a barrel — the wolf to the lamb, the mongoose to the bird’s egg?
I am not saying a P3 can’t be done, but my goodness.
Anyone who has ever negotiated a contract would have, as they say in Yiddish, shpilkes (as in, “Oy I get shpilkes just thinking about meeting my girlfriend’s parents”) before sitting down at the table to do this one.
Saying we need to pay close attention to this PPP adventure in this lack-of-power politics is a monumental understatement.
So let’s see what happens. It’s not like there is any other feasible alternative. But having no other alternative does not mean the one you have will work.
As a concerned citizen, don’t let their happy talk and vaguely based optimism overcome your all-too-appropriate shpilkes.
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