Questions persist about viability of Honolulu rail

by Keli'i Akina, Ph.D., President/CEO Grassroot Institute, May 17, 2022

At this point, the one thing we can rely on concerning the Honolulu rail project is the long list of unanswered questions. Among them:

>> How much will it really cost?

>> How will we pay for its future operations and maintenance?

>> Will it ever be completed, and if so, when?

Those were questions we were asking a decade ago, and those are questions that we are still asking now.

In fact, I asked them again this past Monday on my “Hawaii Together” program on ThinkTech Hawaii, while hosting one of the most influential people in Hawaii who might know some of the answers: Natalie Iwasa.

Iwasa spoke in her private capacity as a community activist, certified public accountant and licensed fraud investigator. But she also is a member of the Honolulu Authority for Rapid Transportation, the city agency in charge of building the rail system. Throughout her 17-month tenure with HART, she has become well-known for asking the hard questions about the system that taxpayers want answered.

Like many of us, Iwasa is concerned about costs. First, there is the final price tag on construction, which we’ve seen jump from its original price tag of $3.5 billion to its current estimate of nearly $13 billion. As big as that number is, it’s still smaller than the estimate for finishing the project in full.

As Iwasa explained, the new plan involves ending the line at the Civic Center and making other cuts and changes, like eliminating the Pearl Highlands Parking Garage.

“Really, the cost for that garage is outrageous,” she explained. “It was $330 million. I think it was like $200,000 per stall. To put that into perspective, this is actually in the plan. They had asked a contractor who recently built a garage on-island — I don’t know exactly where — but that cost was like $35,000 to $45,000 per stall. You can see HART’s estimate for the Pearl Highlands Garage is like four times as much. It is just outrageous.”

The good news, Iwasa says, is that the wheel and track issues have been resolved and construction is more than half done. While some have said the rail is 75% complete, Iwasa prefers to think of it as closer to 64%, due to some stations that still need to be finished.

However, with several major hurdles still ahead, including complex construction requirements in the Dillingham area, Iwasa isn’t confident about the cost projections:

“I personally don’t feel comfortable with the numbers because of the history,” she said. “The major contract we have is from Middle Street to now the Civic Center. We’ve seen time and time again how those estimates have been blown out of the water. So if that contract comes in higher than what is anticipated, or there’s something along Dillingham Boulevard with the utility relocation that comes up, it’s just going to really mess things up as far as the finances go.”

Not only does she worry that the additional $1.4 billion being sought for completion of the project won’t be sufficient, she is concerned about ongoing operations costs. Ultimately, those will fall on the taxpayers, as the HART plan depends on taxes for continued funding.

As a CPA, Iwasa sees a “big flag” in the generous assumptions made about the state’s general excise and transient accommodations tax collections over the next 10 years, which don’t account for policies that could depress tourism, such as laws that resulted in an atypical bump in tax revenues and Honolulu County’s recently enacted Bill 41, which will largely wipe out Hawaii’s economically significant short-term rental market.

Iwasa said she thinks things have improved under HART’s new leadership in terms of transparency, but HART’s lack of forthrightness still is hurting the project. For example, she said, HART last year produced a list of 25 alternatives to the current rail plans, yet it has never been part of a public discussion.

She also pointed to the agency’s new recovery plan, which would end the rail at the Civic Center and have its riders switch from there to “bus rapid transit.”

“The plan is to create a lot of feeder buses and take away some of the express buses. Why aren’t we putting that out there, so those people who are planning on riding the rail understand that they’re going to have to get on a bus, off the bus, on the rail, off the rail, on a bus, off the bus? I think those types of things are still not being discussed, and I’m sure there are other examples that people can come up with.”

Of course, there are other questions as well. For example, if the Federal Transit Administration accepts the new plan, when and how will the rail be completed? And at what cost?

The fact that there is so much uncertainty surrounding the project makes it all the more important that the public stay involved and active. For Iwasa, public participation remains the most vital part of the process.

“I just would really like to stress that people should testify,” she said. “I get it: People are tired of feeling like they’re not being heard. But it is so important, it is critical that you keep telling your decision-makers, your elected leaders, what you think. And, I tell you, it’s going to stay on the record and it’s so important. So that would be, I think, the most important comment that I can make.”

To which I would add: Hear hear. I couldn’t agree more.
____________

This commentary was Keli’i Akina’s weekly “President’s Corner” column for May 13, 2022. If you would like to have his columns emailed to you on a regular basis, please call 808-864-1776 or email info@grassrootinstitute.org.