The Daniel K. Inouye Highway extension project has hit a roadblock.
The state Department of Transportation said Monday it placed the $90 million project that will extend the cross-island route, known colloquially as Saddle Road, from its current terminus at Mamalahoa Highway to Queen Kaahumanu Highway “on hold” due to a lack of funding sources — both state and federal.
“The revenue funding source we were planning on using (rental car income) will not meet projections,” said DOT Spokeswoman Shelley Kunishige, referring to the $5 per day rental car surcharge implemented Jan. 1, 2019, from which the state intended to draw funding in 2021 for the 10.5-mile road project as approved by the state Legislature in May.
The surcharge for rental cars, estimated to bring in $30 million based upon 10 million visitors annually, had become a significant source of revenue for the state. However, that fund has seen little revenue amid the COVID-19 pandemic that’s resulted in a drastic decline in visitors to the state.
The Hawaii Tourism Authority reported Monday that just 2.17 million people had arrived in Hawaii during the first eight months of the year, a decrease of 69% from 2019. During the month of August, alone, arrivals were down 97.6% from the year prior.
The highway extension project also was not selected to receive a share of $1 billion in federal grants via the U.S. Department of Transportation’s (USDOT) Better Utilizing Investments to Leverage Development (BUILD) program for 2020. No Hawaii projects were among the 70 in 44 states selected to receive funding to cover up to 80% of a project’s cost.
“We will continue to submit the Saddle Road Extension project for consideration in federal discretionary grant opportunities,” said Kunishige. “HDOT will also continue with preparation of the project should funds become available.”
That includes completing a draft EIS that was released in April 2017.
As of the most recent update provided Sept. 1 by the Federal Highway Administration’s Central Federal Lands Highway Division, the document is still working its way through Section 106 consultation with State Historic Preservation Division and stakeholders.
That consultation must be completed and a funding source committed before the federal agency can sign off on the draft EIS, allowing the project to move forward.
Saddle Road, most of which was renamed Daniel K. Inouye Highway post-modernization and western realignment in 2013, was originally built in 1942 as a one-lane road to connect military training facilities. The effort to extend the road from its terminus at Mamalahoa Highway to the Big Island’s leeward coast dates to 1999, though it was shelved until 2011 when the state resumed the EIS process.
