Institute warns federal agency about HART’s dubious rail recovery plan

from Grassroot Institute of Hawaii, June 23, 2022

The transit agency is trying to squeeze $744 million more from the FTA so it can finish its over-budget, behind-schedule project

The Grassroot Institute of Hawaii submitted a letter this week to the Federal Transit Administration urging it to view with “extreme skepticism” the Honolulu Authority for Rapid Transportation’s 2022 Recovery Plan.

HART’s plan, approved 6-3 by the Honolulu City Council, is intended to convince the FTA that it should release the last of the $1.55 billion it promised to the Honolulu project in 2012, now down to $744 million.

The FTA has been playing hard-to-get because at the time of the funding agreement, the rail was supposed to cost about “only”$5.12 billion and be fully operational by 2019.

Currently the 20-mile system is barely half built and the cost estimate has ballooned to more than $12 billion — though in its 2022 Recovery Plan, HART is now saying it can bring the project to fruition at a cost of “only” $10 billion.

In the letter to the FTA, Institute Executive Vice President Joe Kent wrote that HART’s new plan appears to contain “overly optimistic assumptions about revenues, ridership and costs, and this could saddle local taxpayers with unstated liabilities in the future.”

The project is already “wildly over budget and behind schedule,” he continued, “so the current schedule of revenues, ridership and costs should be viewed with extreme skepticism. The Honolulu rail should be completed without incurring more costs, increasing taxes or adding any new taxes. Local residents have paid far too much already.”

Others who are critical of HART’s new plan include former HART board member Joe Uno and Natalie Iwasa, a forensic accountant and current HART board member, writing in their private capacities, who submitted a report to the FTA on June 18 that goes into significant detail concerning the rail’s financing, ridership projections, management, transparency and much more.

In their cover letter to the report, Uno and Iwasa expressed concern about HART’s “aggressive revenue projections that will likely lead to shortfalls” and its “cost estimates that only have a 65% chance of being right.”

Also, its “ridership estimates … are too high; [there has been] a lack of consideration and discussion of options that make sense; promises made to the residents and taxpayers of Oahu have been broken several times over the past few years,” and “public trust continues to be very low with respect to HART, while accountability has been elusive

Another critic of the plan has been The Outdoor Circle — “Hawaii’s oldest environmental organization (founded 1912).” In a June 1 letter to the Honolulu City Council, its president, Scott Wilson, said HART’s new plan “does not acknowledge key environmental and operational factors, including sea level rise, ridership objectives, loss of urban tree canopy and public revenue shortfalls that have arisen since the original rail route was planned. These new factors must be incorporated into the Revised Recovery Plan if the project is to be of sound use and value to the people of Honolulu.”

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PDF: Grassroot Letter to FTA

PDF: Iwasa-Uno report

PDF: Outdoor Circle letter