Honolulu rail officials have trimmed their recent estimates for how much the island’s struggling rail transit project will cost and the expected cash shortfall.

Rail is now expected to cost nearly $11.4 billion to reach Ala Moana Center, project officials told City Council members on Wednesday. That’s in lieu of the $12.4 billion estimate they put forth in March

Further, the city faces a nearly $2 billion budget shortfall to build the entire 20-mile line versus the previous estimate of $3.5 billion, according to Honolulu Authority for Rapid Transportation Interim Director Lori Kahikina.

That more optimistic outlook stems largely from a third-party cost analysis by the firm Triunity Management and Engineering, Inc., Kahikina and other HART officials said. They also pointed to state tax revenues rebounding from the global Covid-19 pandemic faster than anticipated.

HART rail construction as the guideway construction nears Middle Street.
Rail’s steel and concrete guideway approaches Middle Street. On Wednesday, HART Board Chairwoman Colleen Hanabusa said stopping the line there was not an option. Cory Lum/Civil Beat/2021

HART has called its $12.4 billion total from March a conservative estimate — one that was based on a 95% chance that the project would not exceed that cost. It’s not clear if there’s a probability attached to the new $11.4 billion estimate. HART did not immediately respond to that question Wednesday. 

Triunity’s report and the details that support its independent cost estimate aren’t expected to be released for several weeks. 

Nonetheless, HART leaders unveiled the new rail figures Wednesday as Honolulu’s elected leaders weigh whether to create a new 3% transient accommodations tax to address city needs, and whether to designate some of those proceeds to rescue the cash-strapped rail project for a third time since construction began.

The new numbers are promising, although they could face public skepticism following years of fluctuating rail cost estimates from HART and the city. “The general public and this council has heard different numbers that change time to time and no reason why,” North Shore Councilwoman Heidi Tsuneyoshi, a longtime staunch critic of the transit project, said at Wednesday’s Budget Committee meeting.

The Triunity report is expected to provide clarity. Kahikina has said that HART received a draft copy, but that draft hasn’t been released. In response to a Civil Beat public records request for the draft, HART said Wednesday that it needed more time. 

Currently, without any added revenue sources, the rail project is expected to collect about $9.4 billion for construction, Kahikina told members of the Budget Committee. That should get the transit line to Chinatown, she added. Yet for rail to be a “functional” system it must at least reach downtown, according to Mike Formby, the managing director for Mayor Rick Blangiardi and a former acting HART executive director.

HART now estimates it will need just under $10 billion to get the system as far as downtown. Kahikina stressed that the destination goal remains Ala Moana, as specified under the city’s funding deal with the Federal Transit Administration.

HART Interim Director Lori Kahikina listens as Mayor Blangiardi conducts his post State of Honolulu speech Q&A with the media.
Lori Kahikina provided updated, rosier budget numbers for rail Wednesday. She is expected to become HART’s permanent executive director. Cory Lum/Civil Beat/2021

As the Budget Committee met Wednesday, HART board Chairwoman Colleen Hanabusa announced the agency’s smaller budget gap for rail on the Honolulu Star-Advertiser’s “Spotlight” program. Hanabusa said that gap could potentially be reduced by an additional $500 million. 

She did not provide further details about the potential cost savings and did not respond to a follow-up request for comment Wednesday.

Hanabusa also told Spotlight that stopping the rail line at Middle Street is off the table despite interest in that option given the project’s latest — and most severe — financial woes.

“Let’s get rid of Middle Street,” Hanabusa said. “There is more than enough money to get to Middle Street and past Middle Street as well.”

Hanabusa said that it’s all but certain Kahikina will become HART’s permanent executive director. Kahikina previously worked as the city’s Environmental Services director and has been HART’s interim director for nearly a year.

Hanabusa, a former state Senate president and U.S. congresswoman, said in response to a “Spotlight” viewer’s question that she would not run for lieutenant governor next year.

She did not rule out another gubernatorial run, however.

“A politician should never say never, and never say no,” Hanabusa said. She ran unsuccessfully for governor in 2018 and for Honolulu mayor in 2020.

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