HONOLULU — Oahu’s rail transit system — the largest public works project in Hawaii — is facing lagging revenues and soaring costs.
HONOLULU — Oahu’s rail transit system — the largest public works project in Hawaii — is facing lagging revenues and soaring costs.
The Honolulu Star-Advertiser reported Friday it’s now expected to cost from $550 to $700 million more than what was originally planned.
Rail officials blame the higher cost in part on $190 million in added costs from construction delays that stemmed from legal challenges and city officials awarding contracts before they were authorized and ready to build.
Adding to the problems, construction bids are coming back higher than expected, officials said. They plan to re-package those projects and solicit new bids next year.
Honolulu Mayor Kirk Caldwell says officials will probably ask the Legislature to extend a 0.5 percent GET tax. That tax was set to expire in 2022.
But revenues from the tax so far are $41 million behind what officials expected to collect. The tax is supposed to fund two-thirds of the project.
“We’re going to be exploring every single option, with no promises, but we’re going to look,” Caldwell said. “We’re going to leave no stone unturned.”
City officials said they still don’t understand why those revenues are lagging when the state is reporting growing GET numbers.
Cliff Slater, who led the effort to stop rail in federal court, called it “nonsense” that rail opponents held up the project in court. He claimed instead that rail officials dragged out the lawsuit in court, as a way to raise legal costs and to “drive us out of the lawsuit.”
The bulk of the city contracts that went out too early occurred under then-Mayor Mufi Hannemann’s administration and preceded HART’s 2011 creation to oversee the project. Those premature contracts resulted in at least $80 million in delay costs.
Hannemann defended the moves Thursday, saying that his administration looked to capitalize on a sagging construction market still trying to recover from the Great Recession. Even if the delays cost $80 million, the contracts came in about $150 million under budget by going out when they did, Hannemann said.
Caldwell shot down the idea of diverting more than $200 million in federal dollars normally used for the city’s bus system.