Honolulu’s struggling rail project will avoid losing $250 million in federal funding that was slated to expire Dec. 31, after the state’s Congressional delegation stepped in and helped secure a yearlong extension.

Whether the city can make enough progress with that extra year to convince the Federal Transit Administration to finally release those dollars remains to be seen.

Sen. Brian Schatz’s office announced the extension in a release Tuesday, saying it will be part of a bipartisan Senate Appropriations deal reached late Monday.

It “buys more time” for the city and the Honolulu Authority for Rapid Transportation to revise their financial plan for the 20-mile, 21-station system and “come up with something that can actually work,” Schatz said in Tuesday’s release.

Federal transit officials have already withheld those grant dollars from the local multibillion-dollar transit project for the past six years due to the city’s inability to get rail done.

HART Rail construction along Aolele Street near the Airport as rail marches towards the urban core of Honolulu.
HART Rail construction continues near the project, but progress has stalled at Middle Street. The FTA had said it needs to see more progress into town before it releases rail’s remaining federal funds. Cory Lum/Civil Beat/2020

In recent months, as rail’s cost and schedule problems have only gotten worse, outgoing Mayor Kirk Caldwell and HART expressed concerns they might lose the funding for good if it were to lapse at the end of the year.

The $250 million represents the rail project’s federal funding share for 2015. It’s part of nearly $744 million total that the FTA has withheld since 2015 amid its concerns over rail’s lack of progress.

The transit line’s full completion is now as much as 13 years behind schedule, and the $5 billion budget set in 2012 has more than doubled.

In 2019, FTA leaders said they would not release rail’s remaining federal dollars until HART and the city awarded the contract to build the final four miles into town and that work came in on budget.

However, the effort to award that contract, under a public-private partnership, endured more than a year of delays and then imploded altogether this fall as the construction bids came in around $1 billion over budget.

City and rail leaders now say it will take at least another year to award the contract under a new procurement, and it’s not clear whether the FTA will continue to withhold funding until it sees that contract.

If it does, HART and the city could face the same crisis of a funding lapse this time next year.

“FTA is currently evaluating recent developments related to the Honolulu Rail Project, including the cancelation of the public private partnership procurement,” the agency said in an emailed statement Tuesday. Its “goal is to ensure that taxpayer dollars are used as intended, and that the project is delivered as agreed upon by the project sponsor under the Full Funding Grant Agreement (FFGA).”

Furthermore, HART and the city will have to come up with a new financial plan for rail and the city. The project will need new funding sources to help close its rapidly widening budget gap in order to make it all the way to Ala Moana.

Nonetheless, project officials say they’re grateful for the added year and the FTA’s continued patience. “This will provide the rail project some needed breathing room while HART and the City look for additional sources of funds to complete the construction of the rail system,” said HART Executive Director Andrew Robbins.

Robbins’ contract with the agency expires Dec. 31, and the HART board opted not to renew it.

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