The agreement, which still needs City Council approval, would pave the way for the feds to provide another $125 million for further Skyline construction.

The board of directors for the Honolulu rail authority voted unanimously Wednesday in favor of a proposed new financing agreement for the Honolulu rail project that may soon free up additional federal funding for rail construction.

The Federal Transit Administration has pledged to provide another $125 million to the city for rail after the Full Funding Grant Agreement is approved by the Honolulu City Council and signed by Mayor Rick Blangiardi. The agreement has also been submitted to U.S. Congress for its review.

The FTA pledged in 2012 to provide $1.55 billion to help finance the Honolulu rail project, but has withheld $744 million of that since 2014 as the city grappled with cost overruns and years of construction delays.

City approval of the new FFGA is a key step in finally unlocking that funding. The $125 million would be the first installment of the $744 million, and the FTA has agreed to release more of that money as the rail project reaches specific milestones.

Jason Lurz Hitachi director of operations and maintenance Honolulu Authority Rapid Transit HART operations and servicing building
Jason Lurz, head of operations and maintenance – North America for Hitachi Rail STS discusses the Honolulu rail project in June. The Federal Transit Administration and the city have a tentative agreement that will unlock more federal funding for rail construction. Photo by Kevin Fujii/Civil Beat/2023

The new agreement acknowledges and accepts the city’s plan to shorten the rail line to cut costs.

The original plan approved by the FTA in 2012 called for building a 20-mile elevated rail line from Kapolei to Ala Moana Center. However, the city opted last year to shorten the rail line to 18.9 miles, defer construction of two stations, and end the line near the intersection of Halekauwila and South Streets.

Natalie Iwasa, a non-voting member of the Honolulu Authority for Rapid Transportation board, noted Wednesday the shorter rail line is expected to have an average weekday ridership of 84,000, which is substantially less than the projected ridership under the original plan.

“I think the public really lacks confidence in this project because of the swing in the numbers, and they don’t seem to improve, they seem to mostly be going down,” she said.

But HART board member Anthony Aalto said that “we are still committed to get to Ala Moana.” In fact, the board has established a permitted interaction group made up of several board members to search for ways to reach that goal.

Colleen Hanabusa, chairwoman of the HART board, said the City Council is now expected to hold two public hearings on the new agreement.

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