Honolulu’s rail transit system likely won’t finish on time — and it could be even more over budget than previously thought, according to those overseeing the project.

In a letter sent Tuesday to the mayor and the City Council chairman, two of rail’s top leaders said the project could cost an additional $200 million to build on top of the $910 million budget shortfall that it already faces. That would push rail’s shortfall above $1 billion and its  total price tag well above $6 billion.

Also, the 20-mile, 21-station system could take about a year longer to complete, opening at full capacity sometime in 2021 instead of 2020, they said.

The potential cost increases stem from more conservative financial estimates by rail’s new board chairman, Don Horner, who signed the letter along with Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas. Horner, a former First Hawaiian Bank chairman, said he believes that construction could be more costly than rail officials thought as the project moves into the crowded, “challenging” urban heart of the city.

Mayor Kirk Caldwell, meanwhile, called a news conference within hours of receiving the letter to say that he doesn’t want to accept the rail duo’s cost and schedule forecast. The HART board, Caldwell said, should do everything it can to keep rail from plunging deeper into a budget hole and to keep the project on time.

“I do not want to accept increased costs of $200 million, projected. We need to work hard to have that not happen,” Caldwell said Tuesday. “I don’t want to see a slippage till 2021, because once we agree to that … it becomes a self-fulfilling prophecy and the pressure is off. I want to keep the pressure on. I do not want to concede that this is going to occur.”

After Caldwell’s briefing, Grabauskas said that HART could work to avoid those cost increases but that the rail agency is fairly certain it won’t finish by January 2020 as agreed to in the city’s funding deal with the Federal Transit Administration. The delays could cost about $4 million to $5 million per additional month, he said.

“We don’t believe the January 2020 date is achievable at this time,” Grabauskas said.

The main reasons that he and Horner pointed to in their letter were the repackaging of contracts for the remaining work that needs to completed, “traffic mitigation initiatives” (where crews aren’t closing as many lanes and working as many hours in busy thoroughfares) and court challenges that helped delay construction about a year.

Although HART by contract has to finish by 2020, Grabauskas said that FTA officials are generally open to an extension because they want the project to succeed.

Horner and Grabauskas say that HART is rethinking the project’s interim opening of the first 10 miles to Aloha Stadium, as well. The agency might instead 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 Mayor Caldwell and Council Chairman Ernie Martin a preview of the more detailed and comprehensive rail financial plan update to come, likely next month. That budget update was supposed to be done earlier this year, but with all the uncertainty over funding, it’s been delayed several times.

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. Nonetheless, Caldwell on Tuesday encouraged the Council to approve the tax extension as soon as possible to help HART award the remaining contracts before their prices climb any higher.

An aide to Martin said Tuesday that he would comment once he had a chance to read the letter. Council members were in meetings most of the day.

Horner’s more conservative estimates on cost, meanwhile, have to do with guessing exactly how much more expensive the project has become to build in Honolulu’s booming construction market.

Rail officials have assumed a 30 percent cost escalation for the construction, but Horner suggests 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,” his letter with Grabauskas states.

Horner’s more conservative estimates could have further impacts on rail’s financial outlook. Earlier this year state leaders authorized a five-year rail-tax extension to cope with the budget gap, and rail officials estimated it would reap $1.8 billion. However, they’re now saying it could instead reap between $1.5 billion and $1.8 billion, based on more conservative assumptions.

Further, it’s still unclear how Horner’s updates might affect the official estimates on general excise tax collections — rail’s largest revenue source. Officials have said the project is on course to receive about $100 million less in GET collections than expected. On Tuesday, Horner declined to say whether that should be updated as well,  to show even fewer GET dollars coming in. “I’m going to stick by what I said in my letter,” he said.

The full HART board is expected to discuss the Horner and Grabauskas letter during its regular meeting later this month.