HART chief says plans to reduce the rail project’s scope are being discussed

Honolulu transit chief Andrew Robbins acknowledged to a City Council committee Wednesday that his staff is now looking seriously at building the financially strapped rail project in phases, a move that may lead to construction halting short of Ala Moana or without 21 stations as has been envisioned for more than a decade.

The Honolulu Authority for Rapid Transportation is under the gun to come up with a new plan in the coming weeks on how it intends to cover the cost of what’s now projected to be a $10 billion project, or risk losing $250 million in promised federal funds that will lapse on Dec. 31 if not released by the Federal Transit Administration.

Andrew Robbins, HART executive director and CEO, told members of the Council Budget Committee that discussions are already underway within the agency about a phased plan to help with the project’s financial issues.

“Right now, we are looking at a phased approached,” Robbins said. “We’ve built internally … what is called a cost-loaded schedule, which is the tool that we’re going to use to determine different options of phasing. You know — how far beyond Middle Street can we go? Do we delete stations? There’s different permutations and we’re looking at all the ones that make sense and understand, based on available funding, how far can we go on each phase?”

A contract could be worked out that allows for the project only to be built incrementally so that no segment is built without separate notices to proceed, Robbins said. Those separate approvals “would essentially be stop points along the way” for which a contractor would understand that for the project to proceed “would likely rely on whether there was additional funding coming into the project.”

While critics and lately even supporters have raised the possibility of stopping the line at Middle Street, Chinatown or somewhere else short of Ala Moana, Robbins’ comments Wednesday were the first by a HART official acknowledging that the agency is looking at a phased approach.

Under a phased plan, officials would “look at our available funding, look at how much we can afford to build in a phased approach and make a match in that way, so that we can work with the amount of funds available, keep the project moving, and buy some time to address funding shortfalls so that we can continuously move the project forward,” Robbins said.

Asked by Councilwoman Kym Pine how far that would take the project, Robbins said it’s something his staff is now studying.

“We’re looking at different options, whether it’s stopping downtown in the first phase, or … deferring stations and building them later,” he said.

The news comes less than a week after Robbins’ staff told HART board members that it now is estimating the project’s price tag to grow by $832 million to $9.13 billion, excluding roughly $1 billion in financing costs.

The agreement that HART made with FTA in order to receive $1.55 billion in federal funds, which includes the $250 million that may lapse, was contingent on the city building a 20-mile line from East Kapolei to Ala Moana and that there be 21 rail stations. So any deviation from that plan would also likely need new approval from federal transit officials.

The Budget Committee, despite Robbins’ objections, voted to advance Bill 71, which would limit the city to allowing no more than $26 million in general obligation bonds be issued for the rail project. That would be a reduction from the $214 million for which the city is currently on the hook.

At the center of the rail project’s latest headaches is HART’s plan to obtain a public-private partnership agreement with a third party to complete the final 4-mile segment through urban Honolulu, a process that has been delayed repeatedly at least partly because of hurdles thrown up by the coronavirus pandemic. There’s rampant speculation that the partnership proposals received carry price tags beyond what the city has been prepared to pay.

FTA officials won’t release the remaining $744 million of the promised $1.55 billion until they are satisfied that the city has a plan to complete the project, and securing a P3 partner by the summer was expected to resolve much of that uncertainty.

But Mayor Kirk Caldwell this month withdrew his support for the P3 process and said he wants the remaining segment of the project to be handled through a traditional design-build scheme with a private contractor.

Last week, the HART board’s Government Affairs, Audit and Legal Affairs Committee voted to recommend that the full board direct Robbins to stop the P3 process again despite Robbins’ objections. That recommendation is on the agenda of the board’s meeting Tuesday.

Robbins, on Wednesday, urged Council committee members to hold off on its vote at least until early next month, to work with the bidders on a plan, with or without a P3 agreement, that would satisfy the FTA.

A “re-procurement plan” is ready to go in case the P3 process does end, he said.

Budget Chairman Joey Manahan said a large reason for the P3 was to reduce the city’s financial risk while ensuring the project is completed as planned. He said he questions the wisdom of the city to enter a P3 if those goals can’t be achieved, which is the reason he reluctantly introduced his bill.

“I’m a little concerned, if we’re doing a P3, how much work can get done?” Manahan said.

Councilman Ron Menor, noting the project price has increased, said he’s skeptical a P3 partnership would keep the project within its original budget, given the rising costs and falling revenue projections. “I’m starting to think that policymakers are really going to have to start confronting the tough question ‘Can the state and city really afford to complete rail to Ala Moana or should we consider possibly shortening the route perhaps ending it at the downtown-Chinatown area?’”

Councilman Tommy Waters said city officials should explore the idea of getting those developing around the planned trail stations to help pay for the project since they are reaping the benefits of the project. “We’re dealing with a shortfall and we gotta figure out how to do it,” he said. “I don’t wanna raise taxes.”