Rail leaders say they’re confident their federal partners will work with them to extend the project’s deadline, given all the challenges that it faces. At this point, however, those federal officials remain guarded about what might happen next — or whether the city might have to pay back millions of dollars for breach of contract.

On Sept. 15, top Honolulu Authority for Rapid Transportation officials announced that the 20-mile elevated-rail project likely won’t finish on time because of delays from court and contract bid challenges, efforts to repackage remaining construction work, and constraints to build the rail without further crippling traffic or hurting businesses along main roads.

HART is obligated under the contract to finish by Jan. 31, 2020. Rail officials now say the project is on course to finish sometime in 2021.

Last week HART’s executive director, Dan Grabauskas, said the local rail agency would work with the Federal Transit Administration in the coming months to agree to a new deadline so that the city would not be in breach of contract.

In a statement Tuesday those FTA officials said they’re working with HART on the project’s latest challenges.

But they didn’t say whether they’re open to an extended deadline — or whether the project could be in jeopardy of having to return any of $1.55 billion in federal dollars to be used to build it under a 2012 FTA funding deal.

“FTA is working closely with HART to address changes to the Honolulu Rail Project budget and schedule,” the statement read. “We have requested an updated cost, scope and schedule from HART and will need to evaluate that information in order to determine next steps.”

Of the $1.55 billion, HART officials say they’ve received $806 million and that an additional $250 million has already been appropriated by Congress. If the city defaults, the federal government “may” demand its money back, according to the funding deal, officially known as the Full Funding Grant Agreement.

The agreement allows federal transit officials to waive a breach of contract and extend the deadline “if there is an unavoidable delay in achieving the operational goals of the project resulting from an event or circumstance beyond the control” of the city.

They could also consider an extension if “it’s in the best interest of the government or the success of the project,” the deal states.

The FTA has been a lot more blunt about what might happen if the city tries to make changes to the rail route or number of stations. It would hold the city in breach for such changes, and if they weren’t fixed, “repayment of the federal funds would be required,” FTA acting Administrator Therese McMillan said in an April 3 letter to Grabauskas.

She sent it during this year’s legislative session, as state lawmakers considered authorizing a rail tax extension and other options to close the rail project’s nearly $1 billion budget gap. HART officials then distributed McMillan’s letter during the session. The state eventually authorized the tax extension, and the Honolulu City Council is expected to hold a final vote on its approval in the coming months.

Earlier this week former Gov. Ben Cayetano, a staunch rail opponent, expressed doubts that the FTA would demand a refund if HART stopped building at Middle Street, completing about 15 miles of the project. “I doubt very much that the FTA is going to say, ‘You’ve got to finish the project,’” he said Monday.