Hawaii and California each boast an ambitious, federally funded rail project. Both have been plagued by severe cost overruns and delays.

Both have faced threats of losing their federal dollars. Both still face a generally uncertain future.

On Thursday, one of those multi-billion-dollar rail projects lost its remaining federal dollars.

Fortunately for those overseeing the Honolulu rail project, it was California.

The Trump administration made good on its threats earlier this year and rescinded its $929 million grant for bullet-train construction in the state’s sprawling Central Valley, part of a larger effort to eventually link Los Angeles and San Francisco with that corridor.

HART Rail Guideway supports at the Airport.
Pillars for Honolulu rail have now reached the airport. The transit project still relies on $1.55 billion in federal funding, but it’s faced many challenges in recent years, pushing it in breach of its federal agreement. Cory Lum/Civil Beat/2019

After the news broke, local rail leaders quickly pointed to key differences that they said bode well for Honolulu’s federal funding.

Honolulu’s grant agreement lies with a different agency — the Federal Transit Administration, which generally focuses urban transit. California’s deal, meanwhile, was with the Federal Railroad Administration.

Further, FTA officials traveled to Honolulu earlier this month to discuss in person what needs to happen before they’ll release rail’s remaining $744 million.

At Thursday’s Honolulu Authority for Rapid Transportation board meeting, members said those discussions went well and that the FTA still appears to want the project to succeed.

Caldwell: This Is What Happens If We Stop At Middle Street

At a hastily scheduled press conference to address the matter, Mayor Kirk Caldwell said California’s plight is a warning of what Honolulu would face if the transit line stopped short at Middle Street, instead of running all 20 miles to Ala Moana Center, as some have called for.

“You’re going to end up with what California has now,” Caldwell said Thursday. “And as mayor I don’t want to go there.”

“We’re meeting our obligations — unlike the California high-speed rail system,” Caldwell added.

Mayor Kirk Caldwell walks out before presser discussing where his administration is going to find the $44 million tor rail in their plan,
Mayor Kirk Caldwell addressing rail funding issues in his office in 2018. On Thursday, he warned Honolulu could lose its federal dollars as California did if it stops the project at Middle Street. Cory Lum/Civil Beat/2018

Honolulu’s rail line opening has fallen at least six years behind schedule, pushing it technically in breach of its federal funding deal. Its budget has ballooned from just over $5 billion from when the deal was signed to an estimated $9 billion currently.

Nonetheless, the FTA has not abandoned the $1.55 billion federal funding deal — the largest under the FTA’s New Starts program. Instead, it’s set new terms for the city to follow before releasing the remaining dollars.

Most recently, the FTA required that the city make more payments up front on its dedicated $214 million share of rail construction. Caldwell and City Council leaders have said they’re willing to do that.

Other key factors to securing those funds remain largely outside the city’s control, however.


According to HART officials, the FTA also won’t release Honolulu’s remaining dollars until it sees the actual bid prices submitted to build the project’s remaining 4 miles, eight stations and transit hub in Pearl City. The agency wants to make sure those prices fall within rail’s $8.3 billion construction budget.

Those bids aren’t expected to be opened until early next year.

“I don’t think we’re out of the woods yet on rail,” Caldwell added at the press conference. “I’m learning massive infrastructure projects, no matter where they’re built, there are huge challenges and hurdles.”

Politics At Play?

Then, there are the politics — which some local leaders have argued put Honolulu more at risk of penalty from the FTA.

California and Hawaii are among the bluest states in the country. When Donald Trump was elected President in 2016, then-U.S. Rep. Colleen Hanabusa expressed concerns that rail’s federal partners could pull funding since the project was already in breach of its deal.

Former Rep. Colleen Hanabusa worried in 2016 that Donald Trump’s election threatened Honolulu rail funding since the project was technically in breach of agreement. Anthony Quintano/Civil Beat

The “Trump administration is a different administration,” city Budget and Fiscal Services Director Nelson Koyanagi added last year as the city struggled to meet the latest FTA demands.  It’s “not real friendly to the project.”

The Los Angeles Times reported Thursday that the move to pull California’s funding followed Gov. Gavin Newsom’s previous remarks that he would scale back the state’s high-speed rail line, which would have put that state’s project in breach of contract as well.

“Newsom appeared to provide an opening to Trump officials,” the Times reported.

The governor later retracted that proposal, but federal railroad officials pulled the funding anyway.

For Honolulu, however, the FTA has exercised patience — so far.

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