In recent weeks, Honolulu’s mayor has met with about half of the 76 legislators at the state Capitol, trying to persuade them that to keep Oahu rail construction moving they’ll need to extend the rail tax — and they’ll need to do it now.
Some of those lawmakers, along with Gov. David Ige’s budget director, have cautioned against making any decision on the rail tax until they get more details on how much it might cost to finish building the project.
But Mayor Kirk Caldwell last week said he can’t provide them with much more about rail’s future costs other than what’s already been made public.
Simply put, at this point it appears no one really knows how much the largest public works project in Hawaii’s history will ultimately cost to complete.
The city does have its own internal cost projections, provided by rail officials, which gives ranges on how expensive they think each of the nine or so remaining major construction contracts might be. Caldwell said he can’t share those cost projections with lawmakers or anyone else because the work hasn’t been put out to bid yet and disclosing those figures, even behind closed doors, would tarnish the process.
It’s not a question of whether he trusts the legislators to guard that information, but rather it’s "a matter of the process," Caldwell said Friday. There’s a "small, finite group of people working on the bid, working on the budget, and it’s done within a small agency group. It’s not shared on the state level."
Caldwell added that he wouldn’t expect state officials to share cost projections on any of their projects either.
"It’s a sealed-bid process" to arrive at the final cost, he said.
Instead, what he and other leaders have shared on the mounting costs is that Oahu’s rail project faces a $910 million shortfall overall. That number includes the rail officials’ undisclosed projections of the rising costs for each of the remaining contracts.
Caldwell said that the lawmakers he’s met with generally understand why he can’t share more details on the future cost estimates. And besides, he added, there’s no guarantee that the internal projections will prove to be accurate.
Earlier this month, Caldwell did provide written responses to rail finance questions from the Legislature’s Ways and Means and Finance committees. His responses listed some $2.24 billion in potential costs to completely shut down and dismantle the project.
Nonetheless, some legislators say the lack of detail is complicating things as they look to hash out a measure that would extend Oahu’s 0.5 percent general excise tax surcharge for a limited time — instead of lifting the tax’s 2022 sunset in perpetuity, as Caldwell and other rail advocates have requested.
"The question that they (rail leaders) need to answer is why are they asking for perpetuity if they are in the hole for $900 million?" Rep. Sylvia Luke, chairwoman of the House Finance Committee, said Thursday. "Then they should be asking for, at the most, (a) five-year extension."
She added, "We’re still trying to get an idea of whether there’s enough support from the membership" for a rail tax extension.
So far the House hasn’t held any hearings on bills to extend the half-percent general excise tax surcharge this session.
A bill in the Senate to extend the rail tax, Senate Bill 19, has passed two readings. It’s expected to go next before the Ways and Means Committee.
Rail leaders say that in early 2016, when the last of the bids to finish the project are opened, they won’t be able to issue all of those contracts without a rail tax extension or some other source of funds to show that they can pay for the work.
They’re on course to run out of sufficient funds to complete the final 4 miles or so of the 20-mile, 21-station project, Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas said recently.
Signs that rail was heading toward a serious budget problem first emerged publicly in August, when bids to build the project’s first nine stations came in at least 63 percent over budget.
Rail officials originally estimated those nine stations would cost about $184 million to build. Instead, the least expensive of the three bids that they received came in at $294.5 million and the most expensive one came in at $320.8 million.
HART canceled those bids and divided the stations into three packages. Bids on the first set of three stations are scheduled to open March 3.
Those nine stations, however, represent only a fraction of the construction work that remains.
In August, when bids for the stations came in way over budget, HART still had about 40 percent of the project left to build. Rail officials had estimated that remaining construction would cost more than $1.3 billion, according to 2012 budget figures that HART provided.
Now, rail officials are bracing for the actual costs to complete that work to be much higher — although they say they’re repackaging the contracts in hopes that the bids don’t come in as dramatically over budget as they did originally for the first nine stations.
Requests for the bids to complete rail are expected to go out later this year.
Luke said Thursday that city and rail officials are likely clueless about the ultimate price tag.
"I don’t even think they know," she said.