On Nov. 25, the state Department of Transportation (DOT) Harbors Division will decide whether to raise fees (tariffs) to redevelop the former Kapalama Military Reservation (KMR) in Honolulu. Wharfage rates would jump 47 percent over three years. This action follows costly site preparation; removal of paying tenants; demolition of historic structures; and construction of a costly, temporary road this year.
However, in the eight years since the idea was floated, much has changed. Shipping lines have consolidated; efficient ships have entered service; automation has gained broader acceptance in the industry; competing priorities have emerged; and the state embarked on other costly projects.
This project may well justify its final cost, and I for one will be rooting for it — but given our experience building the rail, and failure with the interisland ferry —prudence demands a great deal of rigor. To that end, consider:
>> Return on investment. What do Hawaii’s consumers get to justify consecutive, double-digit increases? In exchange for state funding, has DOT extracted commitments from new tenants to employ state-of-the-art automation, as is used around the world? What independent studies confirm this to be the best use of funds and produce the highest rate of return? Is there a current cost-benefit analysis?
>> Affordability. What third-party expertise will oversee life-cycle costs? Have plans/calculations been made widely available for public scrutiny? Can Harbors fund both Kapalama and vital energy needs at Kalaeloa? Have displaced tenants received consideration or financial assistance, and was anyone afforded below-market rent for new spaces? Do costs include funds to reconfigure medians on Sand Island to alleviate truck traffic? What commitments does DOT have that berths will be dredged?
>> Alternatives. Could an operator develop the site at its own expense in exchange for a long-term contract? What options are there to building a nearly half-billion-dollar yard? Did DOT explore an intermodal rail connection to carry chassis’ to/from West Oahu during nonpeak times to reduce truck traffic and congestion?
>> Opportunity cost. What is the total of backlogged capital and maintenance requests from managers on neighbor islands? What are the effects upon current and future maintenance? How much debt remains on the Superferry? Does the project include funds for planned obsolescence (and replacement) of the fixed Sand Island Bridge in order to reopen a critical “back door” in the event the sole harbor entrance is blocked (as recommended in past studies)?
>> Sustainability. Who signed a lease or permit to use the new yard, and was this redeveloped property made available to all through an open, transparent process? Have previous container and cargo projections for the port materialized? With the demise of Horizon lines, and ongoing consolidation of lines worldwide, is additional yard space needed most? How has the Harbors fund and credit rating been affected by the loss of revenue from former KMR tenants?
> Buy-in. When were lawmakers brought fully into the process/price? Is the environmental impact statement valid? What effect has eviction of former tenants been on commercial real estate? Is the proposal supported by a current Harbor Master Plan and by all of the diverse stakeholders in the last plan?
There are many wise, experienced and expert opinions on port development within the international port community. They would likely offer a better assessment of the potential and pitfalls of such a costly project; their insights should be consulted and openly shared.
As an island state, Hawaii critically depends upon the marine transportation system. However, “getting it right” requires that we reach beyond our near-shore views and perceptions lest we build something that we cannot afford — or worse, that we work ourselves into another Superferry predicament that missed key considerations, and to this day, remains an underutilized terminal and visible reminder about the importance of comprehensive planning in the 21st century.
A public hearing in the wharfage rates will be held 6 p.m. Wednesday at the Pier 11 Terminal (700 Fort St.). For details on the harbors proposal, see 808ne.ws/2g4EAlr.
