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The Federal Transit Administration finally has approved the city’s recovery plan for the Honolulu rail project, a development that rail authority Executive Director Andrew Robbins called a “significant milestone” for the 20-mile rail line.
At stake is $744 million in federal funding that the FTA is withholding until it is confident the city has a workable plan for containing costs and minimizing any further delays in completing rail, which is the largest public works project in Hawaii history.
The rail line from East Kapolei to Ala Moana Center was supposed to cost $5.2 billion and be open to the public by early next year. However, the FTA now projects rail, which is half completed, will cost $9.2 billion and not be finished until 2026.
The rail authority had to revise and resubmit its recovery road map three times since it first submitted the plan in April 2017, incorporating new developments into each draft such as a multibillion-dollar state bailout of rail two years ago, and adoption of a new public-private partnership strategy to complete construction through the city center.
The federal government has not released any new funding for rail since 2014, and Robbins said the recovery plan approval announced Thursday clears the way for release of the $744 million the FTA committed to Honolulu rail under the Full Funding Grant Agreement between the city and the federal government.
Robbins told reporters Thursday he was delighted with the news. “Without this approval, receipt of hundreds of millions of dollars for the project would continue to be delayed,” he said.
City officials expect the FTA to release additional federal funding for rail as early as February provided the city is able to negotiate an acceptable public-private partnership, or P3, contract to complete the last four miles of rail line from Middle Street to Ala Moana.
The P3 agreement also calls for the developer to build a 1,600-stall Pearl Highlands parking structure and transit hub, and to operate and maintain the entire rail line for 30 years.
The cost of the P3 construction component alone is expected to total about $1.4 billion, and the FTA will be watching to be sure the cost of that final segment of rail stays within the city’s budget, according to officials with the Honolulu Authority for Rapid Transportation.
The bids for the P3 proposal are expected later this year, and Honolulu Mayor Kirk Caldwell said in a statement Thursday that the cost of the P3 contract must be equal to or less than the cost estimates submitted to the FTA and approved as part of the recovery plan.
“I will continue to demand transparency while this effort moves forward as this project is of significant importance to all of the people of Oahu,” he said in his statement.
He added, “Counter to what opponents of the rail project continue to claim, the city remains on solid financial footing.”
Mel Silva, business manager of the Hawaii Masons Union, IUBAC Local 1, said the union is “thrilled by today’s news. The FTA’s acceptance of the plan gives us confidence that our members will keep working all the way to Ala Moana, and gives us hope that our members families’ will benefit from new housing and other (transit-oriented development) opportunities that will come all throughout the urban core.”
Local 1 members are working on various phases of the project, including block work on the rail stations, finishing cement on the columns and elevated guideway, and finalizing the column pedestals that support the guideway.
FTA approval of the recovery plan was announced by U.S. Sen. Brian Schatz. In a statement released Thursday morning, Schatz said, “This is not the end of the process, but this is an important milestone that recognizes the work that the state and the city have done in getting this project to be more accountable and keep costs under control.”
“I will continue to work with our federal partners to make sure that we reach the finish line. We have a long way to go but this is good news,” he said.
BY THE NUMBERS
$744M
Federal funding that the FTA is withholding until a plan is made for containing costs and delays
$5.2B
The initial cost of the rail project, which was supposed to open to the public by 2020
$9.2B
The FTA’s projected cost of the rail project, whose completion date is now 2026
TRACKING THE PROGRESS
The Federal Transit Administration committed $1.55 billion to help fund the Honolulu rail project but withheld $744 million until the city provided an acceptable rail recovery plan. That proved to be a challenge.
June 2016: FTA directs HART to submit a recovery plan.
April 2017: City submits first recovery plan.
September 2017: City amends plan to incorporate a $2.5 billion bailout of rail by the state Legislature.
November 2018: City amends plan to adopt public-private partnership strategy to complete rail.
May 2019: City amends plan to accelerate the city’s cash contributions to rail.
September 2019: FTA finally accepts city’s recovery plan.
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