HART Chair: New $8.1B projection for rail project could lead to shortened route

HART Chair: New $8.1B projection for rail project could lead to shortened route
Published: May. 16, 2016 at 9:28 PM HST|Updated: May. 17, 2016 at 1:45 PM HST
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HONOLULU (HawaiiNewsNow) - HART may have to scale back Oahu's 20-mile, 21 transit station rail project following new federal projections that came in $1 billion higher than the agency's latest estimate, the chairwoman of the board overseeing the project says.

"We know we have to finish part of this whole rail system," said Honolulu Authority for Rapid Transportation board Chairwoman Colleen Hanabusa. "The question is how much of it can the people of the City and County of Honolulu afford?"

The admission reflects a major change of course for rail officials, who have previously said any discussion of shortening the system's route could result in federal penalties.

The new Federal Transit Administration projection puts the total cost for completing the rail project from Kapolei to Ala Moana Center at $8.1 billion.

Mike Formby, a HART board member, underscores the need for more transparency about rail's cost.

He added there is still no definitive price tag for what it will cost to finish Oahu's elevated transit system. In fact, officials acknowledge that the only thing consistent about rail's cost is that it keeps changing. The question is why.

"We were at $6.9 billion a week ago and then we hear $8 to $8.1 billion the other day, so the Board has to get to place of understanding how we go from 6.9 to 8.1," Formby said.

"We know that part of it is increased contingency. We know that the FTA wants us to have more money in reserve as we encounter problems that were not anticipated -- but we also want to understand how the estimating changed on specific components of the project."

HART still needs to come up with its own figure, but board members say it will be more than the $6 billion amount HART's executive director Dan Grabauskas gave state lawmakers last year -- when he asked for a five-year rail tax extension to cover the project's shortfall.

The new federal projection startled even HART board members.

"How did this happen? We all thought when we were given figures that was it. That when you said $1.2 billion and not a penny more that you meant $1.2 billion and not a penny more, so now we have to go back and figure this all out and explain it," Hanabusa said.

The state Legislature gave the City Council approval for the extension, which has resulted in on Oahu residents paying an additional 0.5 percent surcharge on top of the state's 4 percent general excise tax on all goods and services.

"If HART comes back, if the city comes back next year for another request for an extension, the Legislature will have to ask a lot of hard questions."

"What is the actual cost of this project? That's the most important question. At some point we'll have to get a definitive answer from the city. This is a city project so HART and the mayor has to take the responsibility in reigning in the costs."

Hanabusa, a former U.S. Congresswoman, says lawmakers have told her it won't be easy to ask for more funding from the state.

"They just simply said if you think that because you're our friend that you can come back and get more money, you better think again. So yes, I don't think anybody wants to raise taxes. I don't think the City Council wants to raise any real property tax to cover any shortfall," Hanabusa said.

The city is already getting $1.55 billion from the FTA for construction and HART officials previously said any attempts to shorten the route or change the project's original plans would cause them to forfeit that funding.

Now, board members say that may no longer be the case.

"This is the largest CIP project in the history of the state of Hawaii and we've got to face it," Hanabusa said. "We have the FTA willing to talk to us, we've got City Council willing to talk, we've got the mayor willing to talk, and of course HART is more than anxious to try to resolve this. So it's not a good position to be in, but we at least have players in the right place."

Formby added that he's confident that the rail route will "find a way to get to the urban core."

"The goal is to try to find a way to do what we planned to do, what we designed to do, what we're requiring property to do," he said.

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