Honolulu to Feds: OK Rail Work Or Costs Rise $100M
The cost of the Honolulu rail project could go up by more than $100 million if the Federal Transit Administration doesn’t let construction begin soon.
That’s the thrust of a request sent to the FTA by the Honolulu Authority for Rapid Transportation last week. The city is now formally asking for what’s called a “Letter of No Prejudice,” which would allow construction before the project is guaranteed federal funding.
The “LONP” would be an indication that the FTA is comfortable with the direction the project is heading, and any money the city spends on construction after receiving an LONP could be later covered by federal money. But an LONP would definitively not guarantee that the FTA will fund the project, and any construction costs would be at the city’s risk.
The request is no big surprise — Interim Executive Director Toru Hamayasu has long said an LONP would be the next key hurdle on the road to getting $1.55 billion from the feds. But the timeline and the consequences of delays have never been explained in this much detail before.
— sent to the FTA Dec. 27 and attached to to Honolulu City Council Vice Chair Ikaika Anderson two days later — includes HART’s rationale for why it needs a second LONP1 green light now and can’t wait for a Full Funding Grant Agreement in the fall.
“The consequences of LONP 2 not being approved will have serious impacts to the overall project budget, and in particular, poses the most significant impact on the project contingency,” Hamayasu wrote in the request to FTA Regional Administrator Leslie Rogers. “HART analysis indicates that the total delay impact could be at least $110.2 million if LONP 2 is not authorized in January 2012.”
Hamayasu followed up the request with a flight to Washington DC to meet face-to-face with FTA Administrator Peter Rogoff. as “productive.”
The additional $110 million in costs wouldn’t be triggered overnight on Jan. 31, but would accrue at about $9 million per month of delay, the letter says. That is the cost of mobilized contractors not working and the escalation of materials costs.
“As with any construction project, delays typically result in higher costs, so keeping the project’s schedule on track is important,” HART spokeswoman Jeanne Mariani-Belding told Civil Beat in an email. “We want to do everything possible to keep the project on time and on budget.”
The letter outlines the timeline of construction-related activities for four major contracts that would be covered by the LONP. In all, the request asks for permission to spend $206.5 million on construction during 2012, some of it starting as soon as this month. It was sent days before the FTA told the city it could proceed with final pre-construction planning.
An LONP would clear the way for heavy construction to begin.
Work on the West Oahu Farrington Highway section would include columns, segment fabrication and erection, installation of trackwork, third rail and other aspects of the fixed guideway, according to the request. The letter estimates that construction-related activities on that particular design-build contract will begin this month, while work on the Kamehameha Highway Guideway and Maintenance and Storage Facility contracts would begin in March.
Mariani-Belding said construction would not begin immediately, however.
“Once we receive the LONP, we estimate it should take about six weeks for the contractor to mobilize, which includes assembling workers and ordering the materials needed to begin work on the foundation and columns for the guideway,” she said.
Between receipt of the LONP and the start of construction, the city would issue a notice to proceed — a formal announcement that construction is set to begin.
Of course, an LONP from the feds and a notice to proceed would likely trigger a legal battle.
In their first appearance before a federal judge, opponents indicated that they’ll seek a stop order if the city takes steps that would tie it to steel-on-steel rail.
Read the request and the justification sent to the FTA:
