Editorial: Rail can’t afford more missteps

The Honolulu Authority for Rapid Transportation has waited and worked a long time for this word from the Federal Transit Administration: Approved.

The fact that the FTA last week finally signed off on the recovery plan HART devised to overcome its funding shortfall is undeniably good news. It flashes a green light on releasing the remaining $744 million in federal subsidy for the $9.2 billion project that has been withheld.

And, crucially, it lifts a cloud that has hung over the city’s fiscally struggling rail project for some time, injecting a much-needed degree of confidence that the 20-mile transit system can finally advance toward completion.

Along with the good news, of course, come cautionary notes: The federal overseers are not going to merely accept costs that exceed what’s projected in the recovery plan.

Bidding for the public-private partnership (“P3”) contract, controlling construction of the final City Center phase and some future aspect of rail operations, is the next big step, expected later this year, with the award to follow in January 2020, according to the FTA.

If, for example, the bids come in too high, that will surely spell more delays — which we can ill afford — as HART and city officials scramble to decide how to fill the financial gaps.

That could mean efforts to tap the public purse even more, which would be unacceptable; squeeze the project elsewhere for savings; or renegotiate sweeter terms for the contractor on the back end, making the operational aspect more lucrative.

In addition to completing the last four miles of the alignment, between Middle Street and the Ala Moana Center terminus, the P3 agreement will require the winning bidder to build a parking structure and transit hub at Pearl Highlands, enabling more commuters from Central Oahu to use the rail.

And it will give that developer the rights to operate and maintain the line for 30 years.

Construction of this final stretch is estimated at about $1.4 billion. The city and HART must send the clear message that in no way can bidders expect to find an extra cache of funds supplied by city taxpayers, beyond what’s budgeted.

Certainly elected state officials are in no mood to craft a new bailout plan, which would be the third tax-revenue increase for a project that’s now almost twice as costly as originally expected.

The rail project already has a bigger bite of state taxes than anticipated. Not only do Oahu taxpayers kick in a half-percentage- point surcharge on the state’s general excise tax, but the transient accommodations tax is being siphoned as well. It was a necessary bargain lawmakers struck, given the project’s dire shortfall, but it was extremely hard-won.

And city property taxpayers will certainly, and with justification, balk at any overtures made to capture more money through any additional surcharge there. A property tax increase ultimately can be expected, but for the system’s operation, not for fattening construction coffers. The subsidy from the city budget that’s in the recovery plan, as approved by the Honolulu City Council, is rightly limited to $214 million in CIP funds.

Keeping this complex enterprise within fiscal bounds, even boundaries that have been expanded over time, will be no small challenge. The City Center phase is sure to become the most difficult technically, wending its way through the congested Dillingham Boulevard corridor and urban core.

There are utilities to work around, not to mention the traffic disruptions this will cause, most of the lane capacity to be choked off on a heavily used thoroughfare. Things could go wrong in a mind-numbing number of ways.

It will fall to HART to go over contracts with a fine-tooth comb guarding against change orders and associated costs. Having the additional prodding from the state comptroller, a control implemented by state lawmakers, will be essential in the pursuit of cost-efficiency.

And then there’s the ongoing federal investigation for signs of malfeasance or mishandling. As worrisome as it’s been to have investigators perusing HART records acquired by subpoena, that intense degree of supervision may work to constrain further excesses by all parties — or that’s the hopeful view, in any event.

For now, the FTA has promised “to closely monitor the progress of the City Center procurement,” as stated in the Sept. 5 approval letter from Ray Tellis, regional administrator.

“As this procurement is the largest risk area related to project cost and schedule, it is important that the procurement remains on schedule,” he added.

Builders of the Honolulu rail system, the state’s largest-ever public works project, deserve a moment to take a breath and mark “an important milestone,” said U.S. Sen. Brian Schatz in making the announcement.

But only a moment. The clock starts now on attaining a goal that, for the better part of a decade now, has been painfully elusive.