Feds subpoena Honolulu rail authority for construction documents

The Honolulu Authority for Rapid Transportation has been served with a sweeping federal subpoena seeking construction documents in connection with the $9.2 billion rail project, the Honolulu Star-Advertiser has learned.

The Star-Advertiser reported in December that federal authorities were taking an interest in the project, but it is still unclear exactly what aspect of rail has triggered the investigation.

HART CEO Andrew Robbins declined to discuss the subpoena when asked about it this morning at a committee meeting of the HART board, but a source said the subpoena covers all construction records for the rail project as well as all records that HART provided to the Hawaii State Auditor.

State lawmakers approved a $2.4 billion financial bailout of the rail project in 2017, and as part of that package also instructed the auditor to scrutinize the management and other aspects of rail, which is wildly over budget. The auditor has released two reports that were critical of rail thus far and is expected to release two more installments later this year.

According to a statement from HART released this morning, “the documents required include those going back to the project’s beginning such as consultant contracts, a list of contractors and subcontractors, contractor change orders and supporting documents, archaeological studies and correspondence” with the Federal Transit Administration.

“HART pledges its full cooperation in complying with the subpoena, and wants to assure our many stakeholders that our staff and contractors will continue to work toward completing the project and having it ready to open for limited passenger service next year,” the written statement said.

The rail line from East Kapolei to Ala Moana Center is the largest public works project in state history, and the city has struggled for years with cost overruns and construction delays.

The Federal Transit Administration has agreed to provide $1.55 billion to help finance the rail project, but has withheld nearly $744 million of that money until HART develops an acceptable “recovery plan” for rail.

The city signed an agreement with the FTA in 2012 that called for rail’s elevated guideway and 21 stations to be built for $5.26 billion by 2020, but the project is far over budget. Construction and financing of rail are now expected to total about $9 billion, and the rail authority expects to finish the system in late 2025.

HART documents show the budget for professional services such as engineering, project management and construction management for rail ballooned from $1.183 billion in 2012 to more than $2.08 billion today.

Another budget category called “sitework and special conditions,” which includes utility relocation work, increased from $1.1 billion in 2012 to more than $2.54 billion today.

State lawmakers last year approved a $2.4 billion financial bailout of rail using state hotel room taxes and an extension of the half-percent excise tax surcharge on Oahu, which was the second time the state had to intervene to shore up the project’s finances.

That second bailout prompted state lawmakers to instruct Hawaii State Auditor Les Kondo to scrutinize the financial management of the project to determine whether the money being poured into rail construction is “being managed and used in a reasonable manner.”

Last month the HART board of directors unanimously approved a recovery plan that maps out the path to completion of the project by 2025 or 2026. That plan has been submitted to the FTA for its review.