Honolulu’s rail transit project could now cost $200 million more to build — bringing its projected shortfall to more than $1 billion — and take about a year longer to complete, those overseeing the project now say.

That $200 million would be added to the already $910 million shortfall that the project currently faces, according to a letter sent Tuesday by Don Horner, the Honolulu Authority for Rapid Transportation’s new board chairman, and HART Executive Director Dan Grabauskas to Mayor Kirk Caldwell and City Council Chairman Ernie Martin, providing an update on the project.

The updated figure assumes that it could be more costly to build rail than officials have already estimated, even factoring in the most recent price hikes, as the project enters “a more challenging, costly environment including the restricted Honolulu International Airport location and the urban City Center,” Horner and Grabauskas’ letter states.

Rail officials’ current estimates include a 30 percent cost escalation for the construction, but the two top rail leaders suggest it should be closer to 40 percent. “If we use a range that includes a 40 percent escalation that would add approximately $200 million to the overall costs,” the letter states.

The rail leaders further say that the project will likely be finished sometime in 2021 instead of the first quarter of 2020, mainly due to repackaging of contracts for the remaining work that needs to completed, “traffic mitigation initiatives” (where workers aren’t working as many hours in busy thoroughfares) and court challenges that helped delay construction about a year.

Horner and Grabauskas say that HART is rethinking the project’s interim opening of the first 10 miles to Aloha Stadium. Instead, they say, they might open the first 15 miles so that it includes the airport area and Middle Street transit station. “This configuration would connect our Westside residents to their 35,000-plus jobs at the airport and Hickam/Pearl Harbor,” the letter states.

The document gives the mayor and Council chairman — Oahu’s two top political players who also happen to be rivals — a preview of the more detailed and comprehensive rail budget update to come, likely next month.

It also comes as the City Council considers its final vote on a five-year rail tax extension to help the project climb out of its current budget hole. The letter makes clear that the Council still lacks a lot of the latest facts on the project, ahead of that vote later this year. 

Letter from Don Horner and Dan Grabauskas