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For a second year in a row, federal officials have extended the deadline to use hundreds of millions of grant dollars that Honolulu’s struggling rail transit project was poised to lose.

What remains to be seen, however, is whether the city and rail leaders can persuade the Federal Transit Administration to finally release those dollars — and whether they can spend the money by the new deadline of Dec. 31, 2023. 

The FTA has withheld rail’s remaining $744 million in federal funds for amid the megaproject’s mounting financial, management and construction woes. The official estimated cost for the rail line to reach Ala Moana has climbed by at least $2 billion in the past year alone.

On Tuesday, Hawaii Sen. Brian Schatz’s office announced that he had secured an extension for $493 million of rail’s federal funding by inserting a provision into the nation’s trillion-dollar infrastructure deal. 

That infrastructure package was signed into law last week. Notably, it doesn’t include any additional funding for Hawaii’s largest-ever infrastructure project. Schatz has said that’s because the deal aims to fix and improve existing transit systems, not build new ones.

Nonetheless, the extension buys more time for the Honolulu Authority for Rapid Transportation to craft another FTA-approved recovery plan for rail, plus show how the city plans to pay for its full completion. 

Federal dollars won’t resume flowing for rail until those steps are taken, the FTA previously has indicated.

“HART and the City still need to update their financial plan and come back with something that can actually work,” Schatz said in a statement. “They now have an opportunity to focus on what is most important – developing a clear-eyed plan for the people of Honolulu.”

The FTA in 2012 signed a $1.55 billion spending deal for Honolulu rail with the city. Congress then set aside portions of that funding each year through 2017, in chunks ranging from $200 million to $250 million.

The FTA has withheld the final three years’ worth of rail funding as its concerns have grown. Now, as more time passes without that money being spent, those dollars risk lapsing.

The more than $493 million in Schatz’s provision represents the funds for 2015 and 2017, according to the senator’s spokesman, Michael Inacay.

According to the FTA, the $250 million designated in 2016 had already been extended through Sept. 30 2022.

HART and the city faced their first potential lapse in rail funding last year, when the $250 million set aside for rail in 2015 was set to expire Dec. 31.

Days before that deadline, Schatz secured a one-year extension as part of a Senate Appropriations deal. At the time it was clear that the reprieve would not be enough time for HART to submit new plans to complete the project, which was mired in upheaval.

Schatz’s latest extension buys more time. HART Interim Executive Director Lori Kahikina has said in recent meetings that the agency is working to complete the recovery plan.

Neither she nor HART spokesman Joey Manahan responded to a text message asking when that plan might be done.

The City Council, meanwhile, is poised to pass a new 3% transient accommodations tax that would help make up at least some of rail’s estimated $2 billion shortfall. 

HART’s official cost estimate for the project has more than doubled to at least $11 billion since the federal funding grant was signed in 2012.