Last week top rail officials said the transit project’s budget shortfall could climb to more than a billion dollars and take at least another year longer to build. Some of the project’s most ardent critics now say they worry the price tag could climb even higher.
Former Gov. Ben Cayetano, who ran for mayor in 2012 on an anti-rail 
platform and tried to stop the project in court, pointed this week to a 2010 cost analysis commissioned by his successor, former Gov. Linda Lingle, as an example that the city had been warned its financial projections were too rosy.
The report, done by Infrastructure Management Group Inc. and CB Richard Ellis, predicted that rail could cost $1.7 billion more than expected over a 20-year period. Rail supporters, including former Mayor Peter Carlisle, criticized the report at the time as little more than an anti-rail analysis with a $350,000 price tag.
The report did, however, predict a rail construction shortfall that could be covered by extending the rail tax for between five and 19 years.
Five years later the state Legislature found itself considering a 20-year rail tax extension to deal with a construction shortfall, before deciding to authorize a five-year extension during its 2015 legislative session.
“All this information was already over to the city, to everybody else, and nobody paid attention,” Cayetano, a Democrat, said of his Republican successor Lingle’s report Monday. “If they don’t take steps to reduce the costs,” rail could become a “tremendous sinkhole” to the city and taxpayers, he said.
When local transit officials signed a deal to build rail with federal officials, it was expected to cost $5.2 billion. Now it’s projected to cost more than $6 billion to complete.
Rail officials say they can assure Honolulu residents there won’t be more dramatic price hikes — once all of the contracts to build it are signed. “The good news is you and I will have a much more boring conversation nine months from now,” Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas said Monday. At that point all of the bids for remaining work should be opened. “We’ll have certainty next summer,” he said.
To help stave off cost increases, Cayetano suggests that HART stop building the rail line at Middle Street and then create a bus rapid-transit system from that endpoint into town, instead of building the full 20-mile, 21-station line to Ala Moana Center.
Grabauskas called that idea a “nonstarter.”
The rail agency is already building what’s been deemed by federal officials to be the minimum system possible, he said. The Federal Transit Administration might consider extending the deadline to finish the elevated transit project, but it won’t allow HART to build anything less than the minimum, according to Grabauskas. The move would put the city at risk of breaching its $1.55 billion contract, he said.
Cayetano, who served as Hawaii’s governor from 1994 to 2002, called it “silly” to think the FTA would demand all of that money back. The agency would not look to drive Honolulu into bankruptcy, and, “I doubt very much that the FTA is going to say you’ve got to finish the project,” he said.
On Sept. 15, Grabauskas and new HART board Chairman Don Horner delivered to Mayor Kirk Caldwell and City Council Chairman Ernie Martin — two political rivals expected to compete in next year’s mayoral election — a letter stating that rail could cost $200 million more to build on top of its existing $910 million shortfall.
Horner and Grabauskas further stated that rail would likely be completed in 2021 instead of January 2020. The main reasons they pointed to were the court and contract challenges that stalled the project’s schedule by more than a year, as well as “traffic mitigation initiatives” (by which crews aren’t closing as many lanes and working as many hours in busy thoroughfares).
Repackaging rail’s remaining work contracts to save costs was also a key reason contributing to rail’s likely missing its deadline, they added.
Rail officials insist the move was the right one to save money despite contributing to delays, but they remain unable to explain why they’ve changed the approach to design and construction three times since the project started. If the approach had remained consistent, then that repackaging would not have been a factor causing the delays.
“That predates me,” Grabauskas said Monday. Besides acknowledging its indecisiveness on design and construction, HART points almost exclusively to external factors in causing the cost increases and delays, dating back to Native Hawaiian cultural practitioner Paulette Kaleikini’s successful 2011 lawsuit to stop the project until the route’s full archaeological inventory survey was completed.
“I’m a hard person on myself. Yes, we’re accountable … but we can explain why we made the decisions that we’ve had,” Grabauskas said. “People will be the judge, ultimately.”
Cayetano disagreed.
“What delayed this thing is their incompetence and their misleading people about the costs of this,” he said Monday of rail officials.
