Less than four months ago, the Honolulu Authority for Rapid Transportation — tasked with constructing the city’s cash-strapped and delay-dogged rail line — maintained that if all went according to plan, it would hand over the first “interim service” segment, from East Kapolei to Aloha Stadium, sometime in July.
But last week, in one of the project’s latest departures from set plan, HART interim CEO Lori Kahikina revealed at a City Council meeting that a problem with rail train wheels will affect the interim opening date, potentially pushing it back another year.
The wheels do not fit properly when the tracks cross each other, requiring new crossing points, called frogs. While the problem triggers unexpected expense and delay, it appears to be fixable — and HART must press firmly for manufacturer Hitachi Ltd. to pick up the bill.
Meanwhile, Kahikina, who deserves credit for her public candor, has pointed out that there’s no fix in sight for plugging the project’s growing deficit as the price tag for building the 20-mile, 21-station rail line continues to rise.
Also last week, some members of HART’s board and the City Council were taken aback by hearing — either directly or indirectly from Kahikina — that due to a revised budgeting strategy, the project’s price tag is now up to $12.4 billion. When Kahikina was named by the board in December to succeed Andrew Robbins, whose contract was not renewed, the cost was at roughly $11 billion.
The increase apparently is due to a change in budgeting approach that’s more “conservative” than was used by Robbins. While the estimated actual cost is $11.37 billion, the higher figure includes a cushion for “unknowables” as well as known financing costs and specific contingency funding. Under the new approach, the project is over $3 billion short of what it needs to finish construction.
The money gap comes even as HART expects a $70 million infusion in federal COVID-19 relief money to make up for HART’s 2020 drop in funding from general excise and transient accommodations taxes. Mired in a deepening financial hole, the rail authority now plans to hire federal lobbyists to raise funding — a worthwhile move, given that President Joe Biden’s administration is drafting a sweeping plan to invest in infrastructure projects.
With the budget ballooning and schedules delayed — again — the public deserves transparency in the tracking of problems as well as progress. Clearly, though, over the course of the project’s history, openness has not been a priority.
Two years ago, HART was hit with scathing city and state rail audits. An initial report released by state Auditor Les Kondo, in January 2019, concluded: “Over-promise, under-deliver. It has been the hallmark of the Honolulu Rail Transit Project’s near decade-long stop-and-go journey.”
In response, HART said that since 2017 “we have applied and practiced prudent accounting through a system that tracks all financial costs. Using this information, the HART board is provided and updated with financial reports on a monthly basis.” Still, much of the project’s gains and losses have remained largely murky to the general public.
Just before Kahikina left her post as city environmental services director to head HART, the Federal Transit Administration (FTA) extended the deadline, until Dec. 31, 2021, to come up with an updated financing plan for building and paying for the final leg of the rail project, to Ala Moana Center. Kahikina is still searching for effective ways to mitigate some of the financial trouble, but she is rightly committed to rail’s Ala Moana terminus, to fulfill a funding agreement with the FTA. The completion date is now estimated for 2031.
Speaking on a recent Honolulu Star-Advertiser “Hawaii Spotlight” webcast, Kahikina revealed that a draft of HART’s response to the FTA showed that “what we’re looking at is about a $3 billion shortfall.” She added, “The majority is the increase in cost and construction costs and how we do things. There’s a huge gap that we need to fill. … I don’t have the answers how to fix it.”
Shortly after the webcast, Kahikina apologized to several HART board members for not first alerting them about the deficit increase — revealing the political risks of speaking candidly. She had, though, previously notified HART’s board chairman and vice chairman; further, HART materials posted online for the board’s public meeting earlier this month had put the total price tag at $12.4 billion, with a budget shortfall of $3 billion.
Moving forward, such plain-spokenness should be supported. HART board member Dean Hazama was among those rightly backing Kahikina on Thursday, telling her: “I don’t think you should feel that, I guess, prevented from responding to anything or holding back any information from any stakeholder.”
To that end, rail’s leadership, along with the board and others linked to oversight, must always view the public as a primary stakeholder. The public deserves a seat at the project’s table, and needs its rail CEO to be as hard-nosed on candor as she is with cost mitigations.