Board members overseeing the city’s rail project Thursday approved its largest capital budget yet, clearing rail officials to sign $1.56 billion in contracts in the coming fiscal year to build the project.
The move comes after construction resumed in September on the 20-mile elevated rail system — the largest public works project in Honolulu’s history.
A Hawaii Supreme Court ruling stalled construction for about a year when it required the Honolulu Authority for Rapid Transportation to first complete all the archaeological surveys along the route.
About 70 percent of the fiscal year 2015 budget — roughly a billion dollars — will go toward construction, including work on a Pearl Highlands parking structure and transit center, rail stations around the airport and the elevated track around the airport, Chinatown, downtown and Kakaako, as well as other projects.
The rest of the budget will go to land acquisition and relocation costs (nearly $139 million), contingency spending and other project expenses.
It is the largest single-year budget planned for the $5.26 billion project.
HART officials expect the budget to drop off considerably in the subsequent fiscal year — down to $269 million. Its budgets will shrink even further in the project’s remaining years through 2020.
Between now and 2018, HART anticipates borrowing a total of $700 million, in increments of $100 million, for the years when the project’s general excise tax and federal revenues won’t keep pace with its accelerated spending, according to HART spokeswoman Jeanne Mariani-Belding.
The project will never have more than $200 million in principal debt at any given time, Mariani-Belding said, and transit officials plan for the project’s revenues to eventually pay back all the borrowed funds.
HART originally thought it would start borrowing in mid-2014, but the yearlong construction delay has pushed that plan back to the end of 2014 or the start of 2015, HART Executive Director Dan Grabauskas said Thursday.
Board members also approved $16 million in change orders (added expenses) during Thursday’s joint meeting of the Project Oversight and Finance committees.
The bulk of those added expenses — $12.4 million — went toward a new site for a 30-acre "pre-cast" yard at Campbell Industrial Park, where contractor Kiewit Infrastructure West Co. will make and store concrete sections of the raised 30-foot-wide guideway to be placed atop the columns along the route.
In 2010, Kiewit and city officials realized it would take too long to get the approvals needed for its original preferred site, on Department of Hawaiian Home Lands property, Grabauskas said Thursday.
The new planned site required grading, new fortified roads for heavy trucks and other costs. Kiewit originally estimated about $19 million in extra costs, but "we pushed back" on the company to negotiate to the $12.4 million figure, Grabauskas said.
The shortened construction schedule means the precast site won’t be able to handle all the work at once, and HART will eventually have to locate a second yard, HART officials said. Whatever the price, it would be more cost-effective to get that second yard than to delay construction further, Grabauskas said.
The change orders approved Thursday will be covered by the project’s contingency accounts.
