Rail budget sets ceiling on building costs next fiscal year

The annual construction budget for the Hono­lulu rail project would peak at $1.34 billion in the 2014 fiscal year under a new spending plan given preliminary approval Thursday by a committee of the Hono­lulu Authority for Rapid Transportation.

Construction spending on rail was originally supposed to peak this year, but HART officials delayed most building associated with the project and increased the construction spending planned for the years ahead in the wake of an Aug. 24 decision by the Hawaii Supreme Court.

That decision halted all construction on the rail project until the city completes an archaeological survey of the entire 20-mile rail route. The delay is expected to cost the city $64 million to $95 million in contractor delay claims and other costs.

Daniel Grabauskas, executive director of HART, said the city needs to excavate 46 more trenches to finish the survey, and expects to complete that work next month.

It will then take the city "a couple of months" to complete the report on the survey findings, which will then be submitted to the State Historic Preservation Division for review.

The new six-year construction budget tentatively approved by the HART Finance Committee calls for construction spending to top off at $1.34 billion in the fiscal year that begins July 1, 2013, and then decline to less than $952 million the following year.

The construction budget would then drop to $407 million in fiscal 2016 and $101 million the following year.

The city predicts the $5.27 billion rail project will create thousands of much-anticipated jobs to boost the ailing construction industry, and the 2010 rail environmental impact statement projected that job creation would peak this year at more than 17,000 jobs.

In fact, city contractors report that only a small fraction of those jobs have been created so far because of permitting delays and the August court decision that halted construction.

The HART committee also gave tentative approval Thursday to a $21 million operating budget for the coming year that reduces spending on HART operations by about $152,000.

However, the proposed new operating budget would increase spending for legal costs related to the rail project. The proposed budget for legal costs would grow to $1.7 million next year from $1.2 million this year.

The summary of the operating budget presented to HART board members and the media was limited to a single page, and Finance Committee Chairman Don Hor­ner asked staff to provide a more detailed summary of the budget before it is considered by the full board.