Daniel Grabauskas

On his first day of work as the new rail project chief executive officer, Daniel Grabauskas said he placed a call to someone on the opposite side of the community divide on the project.

"I called Mr. (Ben) Cayetano on Monday, and left a message to say I’d like to talk to him," said Grabauskas, 48. "Obviously he’s a vocal and significant person, with due respect, the former governor. And he has an opinion on this project."

While he acknowledged it’s unlikely he’ll change the mind of someone who is a plaintiff in a lawsuit against the city’s $5.3 billion elevated rail plan and also is running for mayor largely on that issue, Grabauskas said a meeting still would be worthwhile.

"I’ll get a chance to understand, maybe, his opposition," he added. "I have to understand that I’m not from here, and if I’m going to be successful, you have to stop and listen and get everyone’s opinion."

Grabauskas restated an earlier public pledge to improve communications and transparency in the development of rail and maintained that this is the better course of action, rather than playing political hardball in an election year.

He has some familiarity with rocky political landscapes, departing after four years as general manager of the Massachusetts Bay Transportation Authority (MBTA) after a new governor arrived in 2009. The shakeup was officially attributed to complaints about the system’s fiscal problems. But Grabauskas said these issues long predated his tenure and arose from years of uncontrolled spending and mounting debt service expenses.

He arrived here from a part-time public transportation management consultancy, and having just finished a master of business administration degree at Cornell University. Before his years with MBTA, he was transportation secretary for the Commonwealth of Massachusetts for about two years.

The fiscal outlook in Honolulu, Grabauskas said, is far more promising, with an established funding mechanism and savings to start things off. That’s one message he plans to bring to the fore, in a series of community meetings he’s planning.

"There are people who are for rail, there are people who are against rail, and then there’s a bunch of people in the middle who aren’t sure where they should be," he said. "I’m going to talk to everybody."

QUESTION: As you start this new job, what is the take-away lesson you bring from your Boston experience?

ANSWER: One of the things that is very prudent is you come up with a dedicated revenue source to pay off your debt; you’re not going to carry a mortgage. The MBTA is carrying a mortgage on almost everything it’s built in the last 30 years.

In Hawaii, here on Oahu, one of the things which is a very conservative and smart approach is, dedicate the revenue and pay it off basically in a 15-year mortgage. And, by the way, before you even start building, you’re going to bank five years of payments.

And then, basically, while you’re constructing over that 10-year-period, you’re going to collect what’s necessary. Kick in the federal funding, and then you’ll have the operational costs to contend with, but 100 percent of what you need for operations can go to operations, not like it is at the MBTA, where 30 percent of your operating dollars go to pay your mortgage.

Q: There’s a lot of public nervousness about the potential of cost overruns. How do you respond to that?

A: So, I know there have been a lot of statements in fear that there would be cost overruns. But the project hasn’t even started yet.

Q: The previous governor had done a financial analysis, and in the back of the report were examples of cost overruns across the country. … so it’s like an assumption.

A: Right. I think the prudent assumption, any time you undertake any big construction … is to understand you need to build in contingencies for unknowns. And the bigger the project, the more complex, the more you have to build that in. …

The short answer is, I think the federal government has gotten much better, much more aggressive, basically having been burned by some examples in the past, to make sure that the finance plan is built in a fashion that is as solid as we can see into the future, and also has contingencies that are sizeable enough to hopefully offset any increases.

Then the management part comes in, which is that, if there’s an unforeseen circumstance, it’s not like you just write a check. You push back. You come up with creative ways. You do value engineering. You look at other alternatives.

I think what people have to understand is the reason these things give people a great challenge is they are large, they are complex and they do have unknowns.… As you get the design and you understand things like soil conditions and all those, then you further refine the (cost) number. …

So as I have had an opportunity to sit through some preliminary meetings, even this morning, I have a really high degree of confidence that, if nothing else, that the federal government and our folks are working together to get to a (cost) number that’s realistic.

Because nobody sits in my seat and wants to say, “Something’s going to cost more money.” The goal is that, with the rail line, we’re going to be clearly and squarely focused on coming in on schedule and at or under budget, and that’s been our focus.

Q: Do you think Honolulu’s long debate and shifting opinions are unusual?

A: There’s one thing I think everyone does agree with: There’s really bad congestion to deal with. I haven’t heard anybody say that there is no congestion. … There have been a number of different proposals that have been brought forward for the public to consider, solving this universally accepted problem. … BRT (bus rapid transit), rail, rail elevated, rail at grade, more buses, a whole host of different things.

So here we are, after having had all of this long conversation for all of these years. The determination was made and brought before the voters or their elected officials, on the following question: Should we raise money to finally solve this problem. It passed and the GET was put in place. Something like $800 million has now been raised in that regard.

Second thing is, what was passed was it would be a fixed guideway, elevated rail. Boom! … There was a question of, how do you do this? Do we change the charter, do we create a quasi-governmental agency similar to almost any other city around the world that engages in significant public transportation? Yes. So it’s yes, yes, yes.

Now enter Dan Grabauskas. So I look at the project and I would say to you that nothing I have seen surprises me and, frankly, maybe not even where we’re at surprises me.

I can bring it down for people, maybe as just sort of buyer’s remorse. Everybody has probably faced this, whether it’s buying a house or a car or a big TV, right? You do your Consumer Reports, you shop around, you figure out what neighborhood, whatever it might be that you’re trying to buy. And no matter how much time and effort you spend, at that 11th hour, don’t you kind of wonder, “I hope I’m doing the right thing”?

I think that’s where we are again. But I think this project is further along than any other project prior, and more conversation, which has been great. Good conversation has happened on both sides to get us to this point.

Q: So what’s your impression of what you see?

A: The board of directors, when they interviewed me, they said, “What do you think of the project, from your experience as a professional in this field?” And I said, “I think it’s really great.” And I’ll tell you why.

I also have joined the unanimous consensus that there’s a real problem with congestion. When I landed at the airport and I tried to take my cab on the H-1, it was pretty awful. When you look at that roadway and the rush coming in, and there were people in the breakdown lane, there were seven lanes, seven lanes of traffic heading in one direction. And even the four lanes headed in the other direction were pretty darned crowded as well. That’s an amazing thoroughfare to be packed.

And I see amazing bus ridership with the bus, one of the highest in the country, so that there’s an affinity already for public transportation here. I see a plan for a second city and smart growth that says, “Keep country country,” all the right things you want to hear about sustainability and smart development. And the corridor is a very dense corridor between the mauka and makai, where you have development already in place …

So I said to the board, there’s no “best” answer, but I think you have a really great answer to one of the problems. Is it going to solve all the problem? Of course not … but I think that you can use this as one tool. Maybe BRT in addition in the future is going to be necessary. I don’t know, depending what kind of growth you’re going to see.

But adding this to complement the transportation that’s there I believe is going to tackle the problem that everybody agrees on. … I think it’s a really good project, and I think it really has the potential to be a game-changer for the next 100 years in terms of mitigating problems today, and offering some opportunities for jobs today, jobs in the future, and a good source of transportation all along this corridor. When I look at all that, I say, “I think this is good.” And the time is really now.

Q: Do you think the public has unrealistic expectations of this project?

A: Does anyone think if you added 100 more buses, that would solve the problem? No. Did H-3 solve the problem? No. Adding lanes? No. So there’s no one, single solution. …

One thing I have heard that is quite unfair is, “Oh, well, if this doesn’t solve everything, then let’s do nothing.” 

Think about that. I think that’s pretty reckless. What you try to do is to say, “Let’s do something, and let’s do it smart.” If you do something that has multiple benefits, like it will actually enhance the bus, public transportation; it will reduce congestion; it will allow for investment …

I think the day I arrived last week there was a tractor trailer that overturned with some asphalt. That’s not going to interfere with this system. I really do see the ridership is going to be there, and every car that comes off that roadway is going to make that roadway work.