Honolulu Lowers Projected Rail Cost To $5.3 Billion
A long-awaited update to the city’s financial plan for its rail project reduced the overall cost for the project’s cost from $5.5 billion to $5.3 billion. The new estimate includes finance charges, adjustments for inflation, and a $865 million contingency to cover unforeseen costs, according to a statement issued by the mayor’s office.
“What it reflects is what you’ve heard the mayor report,” Wayne Yoshioka told Civil Beat Wednesday afternoon. “As we award the contracts, they’re tending to come in 鈥斅爋n a collective basis 鈥斅爈ess than we had anticipated, and that’s a good thing.”
The updated financial plan is a critical milestone for the project, and paves the way for the city’s possible entry into a “final design” phase that could ultimately lead to a full-funding grant agreement with the Federal Transportation Administration. Such a deal would guarantee the federal government would cover $1.55 billion in construction costs.
“This financial plans is one element that goes into applying for the Full Funding Grant Agreement,” Yoshioka said. “It’s one of the key elements but there are other things as well: Very frequent project-management oversight meetings. They’re contantly having discussions with us about ‘Where are you with the project? How are things going? How is staffing?’ It’s that kind of review and the review of the financial plan that will make them decide whether to allow us to proceed into the final design phase, and then from there the decision is made to furhter move into full funding.”
According to information provided by the mayor’s office, the updated financial plan:
- Estimates revenue from the state鈥檚 GET surcharge applied to Oahu through 2022 at approximately $3.3 billion.
- Keeps FTA New Starts funding the city is seeking constant at $1.55 billion
- Reduces monies that might otherwise be used to fund TheBud from $300 million to $244 million
The city’s previous financial plan for rail was submitted in August 2009, and enabled the city to enter into the preliminary engineering phase. Yoshioka said he expects the city will begin to get feedback about the new plan within a week. He said he and other rail officials hope to enter the final design phase this summer, and obtain a Full Funding Grant agreement by the end of 2011.
“It’s complicated but I think it’s to ensure that the projects that do move forward have a good chance of success,” Yoshioka said. “That assured the federal government that they’re not throwing money at a bad project.”
So far, the city is only permitted to do limited construction related to the rail project, if it wants to be reimbursed by the federal government. Yoshioka said property acquisition along the rail route and the relocation of utilities is going “very well.”
Read the updated financial plan:
