Honolulu Rail Transit: Potential 16% Savings

Aug 22, 2017

The Honolulu Rail Transit Project could save 16 percent in construction costs.
Credit Wayne Yoshioka

The State Legislature is currently looking at ways to allow for the funding of the 8.2 billion dollar Honolulu Rail Transit System.  But, as HPR’s Wayne Yoshioka reports, one study concludes there could be more than an 18 percent savings for rail construction. 

The Honolulu Rail Transit Project is short about 2 billion dollars for construction of the last 4.2 miles of elevated guide-way and 8 stations from Middle Street to Ala Moana Center.  The Pearl Highlands Transit Center is also included in that cost.  Infrastructure Finance Consultant Jill Jameson told the HART Board of Directors last week that Public-Private Partnerships – or P3s – could save taxpayers money.

“There’s a project in Vancouver called the Evergreen Project and they did the Design-Build-Finance, where the private investor would come in and they would finance it with their own financing package and they would then deliver the infrastructure.  The benefit of that is that if they don’t finish they don’t get paid.  They finished in about  three-and-a-half years; they saved 16 percent versus the design-build costs.”

Jameson says that could equate to about 300 million dollars in savings for the last segment of Honolulu’s rail transit project.   But the shorter construction period and lower cost will not decrease the amount of public funding needed.   Senate Transportation and Energy Committee chair, Lorraine Inouye, said last week that state lawmakers did not adequately fund rail transit.

“The original bill, back in the early 2000s, the amount was one percent  and it went with a support of a majority of the labor groups as well as Mayor Hannemann.  I believe it’s water under the bridge but had we stuck with the one percent we probably would not have been in this problem today.”

A one percent GET hike would bring in about 500-700 million dollars annually.  Congresswoman Colleen Hanabusa, who chaired the HART Board prior to winning her 1st Congressional seat, says the rising cost of rail, which has nearly doubled, is responsible for a decrease in support.

“A statement like,’Just finish it, already. Don’t cost me more money but finish it.’  That’s not saying we’re for it.  Because what they’re reall saying is we’re not sure that you were honest with us or I don’t think I had all the information.  But I’m gonna support this in the sense of finishing it.  We’ve invested too much in it.  That’s an erosion of public trust.”

Meanwhile, consultant Jameson says there’s no legislation required to go P-3 for the last rail segment but, warns, decisions must be made quickly.

“For every year of delay in this project, we find that there’s a cost of $114 million to the taxpayers.  The reason for that is because inflation, construction prices, and even keeping your contractors waiting – they have insurance requirements, etc.,. So we do want to underscore the urgency of a decision.  Every day that this project is delayed it’s gonna create additional cost, which creates additional angst, which creates additional need for funding.”

The last big public works project before rail, the H-3 Freeway, took 37 years to build, cost five times its original estimate, and had a price tag of more than one-thousand dollars per inch of roadway.   Wayne Yoshioka, HPR News.