A Federal Transit Administration has agreed to give the city until April 30 to submit a financial recovery plan for its increasingly expensive rail project, allowing Mayor Kirk Caldwell, the Honolulu City Council and the Honolulu Authority for Rail Transportation an additional five months to convince state lawmakers to extend the 0.5 percent general excise tax surcharge on Oahu that they say is necessary to complete the project.
In a letter to Caldwell Tuesday, FTA Region IX Deputy Administrator Edward Carranza Jr. said that while the city should continue with its “Plan A” to build the entire East Kapolei to Ala Moana Center line, it should also simultaneously work on a “Plan B” based on a “build to budget” scenario using an anticipated $6.8 billion in revenues as its price ceiling.
The most recent cost estimates released by HART this week now anticipate the project could cost as much as $9.5 billion for all 20 miles and 21 stations.
“The city has developed a more clear-eyed, realistic plan to get the rail project back on track,” U.S. Sen. Brian Schatz, D-Hawaii, said in a statement. “More must be done in the coming months to ensure we can complete the project, but this extension is welcome news for Honolulu and is further indication of the FTA’s commitment to the rail project.”
A Full Funding Grant Agreement gave the city $1.55 billion in federal transit dollars for the rail project. During the summer, amid concerns of rising costs, the FTA asked the city to submit a financial recovery plan by Dec. 31. The city had asked for the deadline to be extended until next summer, giving it extra time to secure from state lawmakers the OK for an extension of the tax surcharge.
Carranza, in his letter, said the FTA is obligated to protect “the public’s very substantial investment” in the Honolulu project.
“Although the FTA recognizes that Plan A is the City and County’s preferred option, the City and County must continue to advance Plan B sufficiently in the event that they are unable to obtain additional financial resources,” Carranza said. “This includes undertaking a detailed cost and schedule analysis of the proposed Plan B alignment that would end at the Downtown Station; completing ridership studies on the feasibility of de-scoping options; and implementing cost containment and cost reduction measures as appropriate.”