Sunday, June 16, 2024
Hawai'i Free Press

Current Articles | Archives

Wednesday, November 23, 2016
Privatize: Honolulu Can See Its Rail Line Finished Without Raising Taxes
By Rep Gene Ward @ 2:50 AM :: 6580 Views :: Rail

Honolulu Can See Its Rail Line Finished Without Raising Taxes

by Rep Gene Ward

Now that the Federal Transportation Administration has cut Hawaii off from any additional funding as well as making sure the rail at least goes to Aloha Tower in downtown Honolulu, what is our next move?

While state House Speaker Joe Souki and others would like to reach in your pocket for a general excise tax increase or extension, there’s still a better way and it’s pretty simple and practiced by the best rail systems in the world.

Take Hong Kong for example: In exchange for development rights along the rail route for shopping centers, condos and retail stores, the government raised sufficient private money to build the rail.

In Hong Kong, the Mass Transit Railway Corporation was originally government owned, but was eventually privatized, with government as its major shareholder. MTR is profitable because of its “rail plus property” approach to financing and development of new rail routes.

Government grants MTR land development rights along rail routes and receives a cash premium based on the pre-rail value of the land; MTR builds the rail line in partnership with private developers to build up the station and surrounding areas. MTR receives a share of the developers’ profits from these developments, in the form of a lump sum payment, a share of total development profits or revenues generated by onsite businesses, or even partial ownership of developed properties.

Japan has been equally prolific raising private money to build its elaborate rapid transit, bus and rail system. In Tokyo, “rail integrated communities” are the preferred model, and multiple private rail operators compete in a free market environment, which spurs innovation.

Instead of relying on government subsidies, companies have diverse revenue streams from rail-related projects and services, such as real estate development, advertising, retail sales, and passenger travel services; Tokyu Corporation is one such company.

Thanks to these innovative approaches, passengers enjoy low fares, state-of-the art rail stations, and amenities like free wifi, on-site retail shops (food, clothing) and services (banking, dry cleaning, shoe repair).

The common thread here is that private companies, not government, drive rail development. Unlike government entities, private operators need not compete for limited government funding, navigate a complicated public procurement process, or yield to demands of public sector unions. Instead, they can respond quickly to changing conditions and deliver maximum value to passengers.

While Oahu has less population density and more private vehicle use, there are still lessons to be learned from our neighbors across the Pacific Ocean. The City could consider transitioning the Honolulu Authority for Rapid Transportation to a private entity, and lessen the burden on taxpayers by maximizing opportunities to capture value from real estate along the rail route.

One proposal that’s been getting recent attention would require the city to assess a fee on landowners and developers who stand to benefit from higher property values once the rail system is in place; the fees collected could go toward rail construction as well as upkeep and future expansions.

Regardless of the type of value capture mechanism used, the city must find a sustainable way to complete the rail project without turning to our already overburdened taxpayers.

We can do this without touching taxpayers’ wallets and a company has already expressed interest in doing this for Honolulu.



TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii