Honolulu rail costs ‘unimaginable,’ retired transit official says

A retired Federal Transit Administration official who had evaluation responsibility for America’s rail projects — including the city’s troubled system — called Honolulu’s spiraling costs and $3 billion deficit “unimaginable” and “far beyond” anything he has seen across the country in 30 years with the FTA.

Twenty-one rail projects around the nation averaged cost overruns of just over 6% compared with their original funding plans between 2003 and 2007. So the Honolulu Authority for Rapid Transportation’s current cost estimate of $12.449 billion represents a 143% escalation above its original cost estimate of $5.12 billion when the city signed its Full Funding Grant Agreement with the FTA in 2012.

Ron Fisher retired in 2009, before the FFGA, but continues to follow the HART project. Fisher spent 30 years at the FTA and retired as director of the Office of Project Planning in the FTA’s Washington, D.C., headquarters, with the responsibility for rating and evaluating every rail project in the country that sought federal funds, including HART.

Fisher called Honolulu’s escalating costs and shortfall “unimaginable” and unprecedented in his career evaluating dozens — if not hundreds — of rail projects.

He cited a 2007 study by the FTA’s Office of Planning and Environment that found that “21 projects completed between 2003 and 2007 … exceeded the inflation-adjusted estimates developed in alternatives analysis by 40.2 percent, the final design entry cost estimates by 11.8 percent, and the FFGA estimates by 6.2 percent.”

“The Honolulu project is way beyond anything that I’ve observed,” Fisher told the Honolulu Star-Advertiser on Monday. “I’m shocked. … Whenever I see the costs going up, I’m personally flabbergasted. It is way beyond and unmatched by anything that I have observed. Of the projects we’ve done in the last few decades, there’s nothing that even approaches that cost overrun. It’s extra­ordinary by any measure.”

Fisher retired before construction got underway in Honolulu, so he has no direct knowledge of why the original estimate ballooned so much.

Some cost overruns were to be expected because of the need to import labor, expertise, consultants and materials from the mainland to Hawaii, he said.

The original estimate of $5.12 billion also may have been too conservative, Fisher said.

“Prior to the FFGA, it was obvious the project would be challenging,” he said.

The 20-mile, 21-station rail project is scheduled to run from East Kapolei to Ala Moana Center, Hawaii’s largest transit hub. It’s not scheduled for completion until March 2031.

Once past Middle Street and the problem-plagued Dillingham Boulevard corridor, there is no money to build the remaining 4-mile stretch of rail and eight remaining stations from Kalihi to Ala Moana Center.

The higher costs and budget shortfall put rail officials in a tough place because Fisher assumes they have little credibility left with the FTA to seek additional funds.

“The $3.5 billion shortfall is a lot,” Fisher said. “We don’t know that the $3.5 billion shortfall is reliable. It could be even more. There’s nothing in the project history that suggests HART can bring in the project at the estimates. … It would be highly unusual for FTA to say, ‘We’re going to reward you with additional money for a project that seems to be incurring incredible cost overruns.’”

There should be a serious “data-driven” analysis underway and presented to the public and decision-makers to consider alternatives, including stopping rail short of Ala Moana and other ways to cut costs, Fisher said.

“Because the shortfall’s so dramatic, there are questions about where should we stop the project,” he said. “Should we eliminate stations?”

In a subsequent email, Fisher wrote:

“If the shortfall of funding to complete the project to Ala Moana Center cannot be found, then this project can no longer proceed as being in the construction phase. The reality is there are fundamental planning issues which must be addressed given there are now optional ending locations for the stations. To make informed decisions of the best terminus location, reliable information should be developed for each optional terminus that addresses ridership, cost, bus connection operations, environmental impacts and other impacts. This is critical if HART wants to produce credible information for the public and decision makers to examine a shortened project that has never been vetted with the public and other interested parties.”

In his interview with the Star-Advertiser, Fisher said there was no precedent during his career at FTA to indicate how FTA officials will respond when Mayor Rick Blangiardi, Council Chairman Tommy Waters and interim HART CEO and Executive Director Lori Kahikina meet with them this year and lay out their the project’s problems.

“Certainly, the cost overrun history would indicate there’s nothing like this” that FTA has faced, Fisher said.

Without citing specific projects, Kahikina disputed that rail projects average cost overruns of 6% compared with their Full Funding Grant Agreements.

“I find it hard to believe that a mega rail project is going to stay within 6% of its (original) cost,” she told the Star-Advertiser.

Asked about the main reasons for HART’s higher costs, Kahikina said, “I can’t speak for my predecessors, but I think their estimates were too aggressive (conservative). Even at $5 billion it may have been too aggressive.”

HART’s current fleet of 17 trains remains grounded more than two weeks after Kahikina was told that a door on one of the automated trains was discovered open during daily test runs, a violation of safety protocols.

Fisher said the door malfunction — and a lingering problem of too-thin wheels and too-wide track at 12 junctions — is not worrisome to him.

“I wouldn’t say that having problems with doors is that unusual,” Fisher said. “There are always bugs that you have to sort out.”

He also said that political pressure surrounding the HART project is not unusual.

“Every area has their own politics,” he said.