Rail officials to seek $350M loan

Rail officials to seek $350M loan

HONOLULU (HawaiiNewsNow) - Rail transit officials are looking at cutting back on detailings at stations, using less expensive materials and and even delaying construction of one of its largest parking structures at the Pearl Highlands station.

But it's not going to be enough.

"Given the magnitude of what we're facing, I have to tell you and the public there's not enough to cut to make up that deficit," said Dan Grabauskas, CEO of the Honolulu Authority for Rapid Transportation

Faced soaring construction costs and lower tax revenues, HART faces a projected shortfall of up to $900 million.

To pay its contractors and ease its cash flow problems, HART said it will have to borrow up to $350 million in the form of short-term bonds this summer.

"What we're really talking about is making sure we have the financial wherewithal necessary to make payments for the project."

City Council Budget Committee Chair Ann Kobayashi said she plans to vote no on the loan plan. But others will likely go along with the measure.

She thinks HART should do a better job of reigning in its expenses.

"I don't understand who is doing their business plan or financial plan and why we are in the mess we are in today," she said.

"It's like asking every taxpayer to co-sign a loan for them."

And the costs for the rail project will only go higher.

Later this year, HART officials will unveil bids on the final ten miles of the rail project and those costs will likely be much higher than projected.

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