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Joe Kent is right on the money (“Honolulu P3s could violate debt limits,” Star-Advertiser, Island Voices, Nov. Opens in a new tab10) Opens in a new tab.
He reported that the P3 (public-private partnership) is actually a “debt” owed by the city to the private company building this last phase of the rail project. While the mayor, City Council and Honolulu Authority for Rapid Transportation are calling this a better way to ensure the project is done on time and on budget, the devil is in the details.
P3 is just another way of saying, “Buy now and pay later.” The private company puts up the money but the city pays it back, with interest and profit, by paying the partner $125 million annually for 30 years. That’s a lot of money for the city to raise.
On paper, it will look like the city has magically performed a miracle: finishing off rail with the $1.4 billion as planned right now, but at the same time, paying off the private partner with payments that don’t count against the rail cost overruns.
Mary Monohon
Kailua
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