The financial foundation of the city’s planned $5.3 billion rail transit system appears sound, the head of the Federal Transit Administration assured U.S. Sen. Daniel Akaka and other senators in Washington yesterday.

At issue is whether the city, through its 0.5 percent general excise tax surcharge and projected federal funding, will be able to pay for the project and whether costs will increase.

FTA Administrator Peter Rogoff said the federal agency, which has yet to commit federal funding for the project, is still reviewing the city’s latest financial plan, released last month.

"We did recently conclude a risk assessment where we found that the risk was actually under control, and the local authorities’ proposal to lower the cost estimate was reasonable, based on how much of the project they’ve gotten under contract," Rogoff said.

Rogoff made his remarks at a hearing of the Senate Committee on Banking, Housing and Urban Affairs. Akaka’s office provided audiotapes.

Akaka asked Rogoff about funding for the project, and the kind of oversight the FTA will exert.

The FTA is not expected to make a decision on a full-funding grant agreement, which authorizes federal funding, until late 2011 or early 2012. Rogoff reiterated that the FTA is proposing to budget $250 million for the project in fiscal year 2012. But federal oversight continues with a management consultant who will monitor costs, he said.

He said that has worked with other municipalities.

"When we see them going off that curve, we have some conversations about how we can get an improvement plan or a project management plan in place to keep the project on time and on budget," Rogoff said.

"Our methods aren’t always perfect, but we’ve had steady improvements in terms of projects that are coming in on time and on budget over the years."

Rail opponents are concerned about the project’s cost, saying that change orders will raise the final price tag.

In a recent Star-Advertiser and Hawaii News Now poll, nearly 9 in 10 residents agreed that the project’s cost will likely rise.

Rogoff reiterated the FTA’s support for the project, saying that a good bus network such as Honolulu’s can accomplish only so much.