Honolulu city leaders offered a clearer picture Wednesday — although not a full one — of how much it will eventually cost to operate and maintain the island’s rail transit system.

At a press conference led by Mayor Kirk Caldwell, they announced they’d signed an updated $918 million deal with Hitachi Rail Honolulu JV to run the rail line and its driverless trains for the first 13 and ¼ years in service.

Caldwell and other transportation officials said the agreement made last week will cover the bulk of rail’s operating costs for more than a dozen years. They stressed that it gives the public its first solid look at how much it will actually cost to run the system.

“What we’re talking about today is a known contract, where we fixed the number, we’re obligated to pay — and they’re obligated to deliver,” Caldwell said Wednesday.

Mayor Kirk Caldwell holds some legal documents during security camera press conference.

Mayor Kirk Caldwell, pictured in 2019: “What we’re talking about today is a known contract” for future rail operations.

Cory Lum/Civil Beat

Once more passengers start riding the train, transit officials hope fare revenues will help taxpayers recoup at least a quarter of that $69 million per year.

“It’s a nut that we can cover” with the city’s budget, Caldwell said.

It’s hardly the entire rail operations cost, however.

The Hitachi portion excludes electricity, security, administrative oversight and other so-called “O&M” components needed to keep the elevated transit system running.

Under rail’s federal recovery plan, the power costs alone would come to about $19 million in the first year operating the full rail line to Ala Moana.

Administration, meanwhile, would cost about $8 million that year. Security would cost nearly $3 million.

Rail Recovery Plan Operations

Rail’s recovery plan projects it will cost nearly $127 million to run the transit system in its first year of the full 20-mile service. That’s nearly twice as much as Hitachi Rail’s new operations deal, which averages $69 million annually.

Honolulu Authority for Rapid Transportation

All told, it’s expected to cost nearly $127 million to run the full 20-mile, 21-station rail line in its first year, according to the Honolulu Authority for Rapid Transportation recovery plan. That’s nearly twice as much as the $69 million Hitachi figure touted Wednesday.

Wes Frysztacki, Caldwell’s transportation services director, said they would unveil a detailed picture on those additional operations costs next week as part of the annual budget process.

“We’ll have the full cost of operating rail for the city in that budget and it will be in extraordinary detail,” added Frysztacki. “I don’t think we want to get into that Q&A right now.”

‘A Lot Of Different Assumptions Had To Be Updated’

The revised, $918 million deal over 13 years is nearly $100 million more than what the city agreed to in 2011 with Ansaldo Honolulu JV, which later became Hitachi Rail.

The original $830 million O&M deal with Ansaldo included “a lot of different assumptions that had to be updated,” said Mark Garrity, a longtime Honolulu transit official who now works on contract as the city’s operations and maintenance interface manager.

Basically, Garrity is helping the city prepare to run rail once HART hands the system over.

Under the revised deal “we’re actually getting better service, we’re actually having more people show up and work at each of the stations,” Garrity added. “The original contract did not have a station attendant at each station. So we’re having some additional or improved services.”

Furthermore, HART’s decision to run four-car trains instead of two-car trains contributed to the added cost, Garrity said.

HART rail guideway car photo op Farrington Hwy Waipahu Sugar Mill1. 30 may 2017

Workers test rail’s four-car driverless trains in Waipahu. Hitachi Rail Honolulu JV will operate the trains on a $918 million contract for the first 13 years. That deal doesn’t cover the full operating and maintenance costs, however.

Cory Lum/Civil Beat

The $830 million deal was part of a larger, $1.4 billion contract to have Ansaldo design build operate and maintain the rail line’s driverless trains plus its communications and signaling system — “the brains and the trains,” as rail officials sometimes described it.

It was the largest public contract awarded in Hawaii to that point.

Meanwhile, HART and the city expect to lump Hitachi’s new $918 operations million deal into the public-private partnership, or “P3,” that they hope will finally get rail finished.

That proposed partnership includes a construction component to build rail’s final four miles into town and a transit hub at Pearl Highlands.  But at the bidders’ request, it includes a 30-year operations component as well to run the system.

Hitachi, officials said, would essentially become a subcontractor to the venture that wins the P3 bid. When Hitachi’s 13-year contract is up, that venture could continue with Hitachi or choose someone else, Garrity said.

Wednesday’s announced deal gives the P3 bidders more clarity as they finalize their proposals, Caldwell said. HART expects to get those bids in April and announce an award in May.

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