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Review

Rail’s growing money pit

in Rail
Honolulu rapid transit elevated rail-2

The Honolulu Authority for Rapid Transit (HART) experienced another fiscal shortfall, recently, when General Excise Tax (GET) surcharge revenues in the latest quarter fell $8 million short of projections. That brings rail’s total tax deficit to $39 million. This is just the latest in a growing list of financial blows and disappointments related to the state’s largest public works project ever. Here’s a timeline of some of rail’s financial setbacks:

2010-2011: HART faces mounting criticism over the amount it is spending on public relations, presumably to manage negative press and speculation into the controversial rail project. Over-compensation and -employment for HART communications is estimated in the hundreds of thousands, at least. In July, 2012, HART CEO Dan Grabauskas finally cuts half the PR staff.

May, 2013: HART approves more than $10 million to pay for delay costs after a Hawaii Supreme Court decision halts construction.

September, 2013: Safety gates to prevent riders from falling onto the future rail tracks were accidentally left out of the initial project budget. The nearly $30 million dollars needed to build and install the gates will now come from the project’s contingency fund.

August, 2014: Bids to build the first nine rail stations come in more than $100 million over projections. HART originally budgeted $184 million (including contingency funds of $34 million) for building the stations, but the lowest bid came in at $294.5 million.

November, 2014: Concerns over rail’s electricity supply arise. HART previously said relocating utility poles, electricity lines and other utility infrastructure would cost $63 million, but that did not include the actual cost of electricity, which was an unresolved matter with Hawaiian Electric Company.

December, 2014: A financial assessment released by rail authorities says the project is on track to cost $500 million more than expected. Officials blame lagging tax revenues, rising construction costs and project delays. HART’s total contingency fund is just $538 million.

January, 2015: Rail’s budget shortfall rises to $910 million, bringing the total cost of the project to more than $6 billion.

March, 2015: Bids to build three rail stations in Waipahu come in far above projections. The city estimated building stations at Leeward Community College, Waipahu and West Loch would cost between $60-75 million, but the lowest of five bids came in at just under $79 million.

July, 2015: Amid growing concerns about rail’s funds, Governor David Ige signs House Bill 134, which extends the half percent GET surcharge five years, from an end date of 2022 to an end date of 2027. Officials say the surcharge could be extended again if necessary.

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