Rail’s federal partners aren’t divulging yet how they’ll respond now that the state Legislature has failed to bail out Honolulu’s financially troubled transit project.
When asked to weigh in on the latest crisis, the Federal Transit Administration released a statement Friday that acknowledged it had received local rail officials’ recovery plan for how to deal with the situation but said little more.
The island’s 20-mile, 21-station rail project now faces an estimated budget deficit of up to $3 billion depending on how it would be financed, officials say.
“We are currently evaluating the plan and will determine next steps after we have completed our review,” the FTA statement read. The agency added that it does not have an estimate on when it would issue its response.
The city’s plan, however, remains largely incomplete because it still doesn’t answer how it intends to make up the project’s multibillion-dollar deficit, rail leaders have acknowledged.
The city delivered the recovery plan last week in order to make the federal agency’s April 30 deadline, and it then hoped to add the financial answers after the legislative session wrapped. But talks abruptly collapsed between the House and Senate at the 11th hour, leaving rail with no new additional support and no new answers for the FTA.
“Obviously, the recovery plan doesn’t accomplish that objective at this point, so we’re already past the deadline,” Honolulu City Council Chairman Ron Menor said Wednesday.
Honolulu has a $1.55 billion funding deal with the FTA for rail, but its massive cost and schedule problems have placed the city technically in breach of that contract. Menor said he believes the FTA won’t wait for the Legislature to attempt to hash out a deal during the 2018 session. The agency, he said, would likely revoke funding by then.
“If we wait a year, I am really concerned that the rail project would be in serious jeopardy, based on conversations I’ve had with FTA officials,” Menor said Wednesday.
The city had received $722 million of its federal funding share as of Feb. 24, according to HART’s March report, the most recent one available on its website.
Some city and state lawmakers hope the Legislature will be able to reach an initial agreement and convene a special session in the coming weeks to approve a funding deal.
HART officials estimated in January that it would cost the city approximately $3.7 billion to stop building and cancel the rail project. That figure assumes the city would return the full $1.55 billion to the federal government and that it would pay nearly $2 billion to cancel existing contracts and cover the claims associated with them.
It does not include the more than $2.6 billion that the city has already spent on rail to date.
Despite that hefty price tag, some vocal opponents of the project, such as University of Hawaii law professor Randall Roth, have suggested that city officials consider “pulling the plug” on rail if they find that option makes more sense in a cost-benefit analysis.
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