Honolulu leaders aim to curb cost overruns, promote benefits of city’s first passenger-rail system

A map shows Honolulu’s planned 20–mile passenger–rail system.

By Daniel Niepow, Associate Editor

Honolulu is home to 350,000 residents — a small sum compared to the likes of New York City or Los Angeles, where millions of people live. Even so, the Hawaiian city experiences some of the worst traffic congestion in the United States. In a 2014 ranking of congestion levels across the country by GPS-maker TomTom, Honolulu came in third, surpassing New York City, Chicago and many other much larger cities.

To reduce gridlock, city leaders are overseeing a plan to build a 20-mile elevated rail system. The largest public works project in Hawaii’s history, the rail line will run from Kapolei in the west to the Ala Moana shopping center just east of Honolulu’s downtown area, with a stop at the Honolulu International Airport.

Voters approved the plan in 2008, and the Honolulu Authority for Rapid Transportation (HART) was formed in mid-2011 to shepherd the project.

Cost increases, delays and local opposition have plagued the more than $6 billion project since ground broke in 2011, but HART executives are making concentrated efforts to rein in expenses. They’re also doing what they can to promote the line’s benefits and mitigate negative impacts of construction.

“It’s going to be disruptive and it’s going to be a challenge,” says HART Executive Director and Chief Executive Officer Dan Grabauskas. “We’ve let people know it’ll be one step backwards and two steps forwards.”

HART has ordered 80 driverless rail cars for the project.
Source: Honolulu Authority for Rapid Transportation

In November 2012, HART received word of the Federal Transit Administration’s (FTA) intent to sign a $1.55 billion full funding grant agreement. At the time, the rail project was estimated to cost $5.2 billion, with the balance covered by Honolulu’s general excise tax revenue. However, capital costs have since jumped to $6.4 billion.

Sticker shock

The increase is due, in part, to a Hawaii Supreme Court decision in August 2012 that led HART to suspend construction for more than a year, Grabauskas says.

The court ruled that the project should not have proceeded without the city conducting an inventory survey of archaeological sites — such as Native Hawaiian burials — located along the alignment. Accordingly, HART halted construction while the study was completed. The agency didn’t resume construction until September 2013.

When bidding resumed, prices had increased 10 percent to 14 percent, says Grabauskas.

Additionally, HART faced a separate lawsuit that in February 2014 went before the U.S. District Court of Hawaii and the 9th U.S. Circuit Court of Appeals. A group opposing the project alleged that government leaders didn’t adequately explore other transit options during the environmental review process.

The courts rejected the opponents’ arguments. And, at the district court level, a judge removed an earlier injunction prohibiting HART from acquiring property on part of the alignment.

Ultimately, the lawsuits delayed the project and contributed to the cost increases, Grabauskas says.

“We’re bidding the remaining contracts two or three years later than we thought we would,” he says. “Time is money.”

Although there’s no “silver bullet” for addressing the price jumps, the agency is taking a series of steps to keep costs in check, Grabauskas says.

For example, HART no longer will issue contracts for segments where it hasn’t secured right-of-way agreements. HART leaders also are working with construction companies to find ways to repackage contracts.

Cost control

The agency had planned to award contracts for the guideway and accompanying stations separately. After consulting with builders, HART opted to combine both elements into single contracts for each geographic area.

“We’ve taken the opportunity when we were not in construction … to really sit with a lot of the construction companies and try to learn from them how we could modify our general conditions in our contracts,” Grabauskas says.

So far, HART has awarded contracts to a mix of local companies — such as Hawaiian Dredging Construction Co. and Nan Inc. — and big-name national companies like Kiewit Corp., which was tapped to build the first 10 miles of the guideway, along with a 43-acre rail operations center in west Oahu.

Meanwhile, HART leaders expect to save money on operating costs by employing a driverless fleet. The agency contracted AnsaldoBreda, which was acquired by Hitachi Ltd. in November 2015, to build 80 fully automated rail cars in four-unit consists. The first train is being built at a plant in Pittsburg, Calif., and is expected to arrive in spring.

On a per-mile basis, the cost of operating the trains should be about 40 cents, or half the cost of running the city’s bus system, Grabauskas says. Each four-car train will be able to carry 800 people.

The rail system’s total operating costs would be $110 million to $120 million annually, depending on electricity usage and other factors.

Electricity and staffing are expected to consume the largest part of HART’s yearly operating budget, Grabauskas says, estimating that the agency will employ 300 workers once the system is in service by 2021’s end.

As HART leaders endeavor to keep project costs in check, they’re marketing the line’s traffic-mitigating potential to the public. By 2030, the agency expects daily ridership to reach nearly 120,000, which could mean a significant reduction in cars on city roads. But until the line opens and people can “tangibly see the benefits,” it remains a challenge to sell the idea to the public, Grabauskas says. So, the outreach continues.

Getting the public on board

For example, HART leaders are giving presentations at neighborhood board meetings to provide updates and answer questions from the public. On local cable access and online, they also broadcast the monthly “Honolulu on the Move” program, which features interviews with project leaders on any recent developments.

Whatever the outreach method, HART execs focus on three main benefits of the line: traffic reduction, decreased environmental impacts and economic development.

As residents opt to commute by train instead of by car, greenhouse gas emissions would drop, HART leaders maintain. What’s more, the project could cut Honolulu’s daily transportation energy demand by 3 percent, or the equivalent of 120,000 barrels of oil, according to HART’s website.

There’s also the potential for transit-oriented development near rail stations. This kind of development — which aims to create walkable neighborhoods that concentrate housing, shopping and jobs near transit centers — could bring both economic and environmental benefits to the area.

In addition, HART execs set up a “myth busters” page on the project’s website, where they address various claims leveled against the project, including concerns about cost and safety. One claim alleges that the project is unsafe due to cracks found in the guideway; HART responds that all construction must undergo “rigorous” quality and safety inspections. Furthermore, the agency notes that it had already identified these cracks, which would be repaired at the contractor’s own cost.

HART officials are trying to lessen the construction project’s impact on local businesses situated on line, too. Last year, HART launched a program called “Shop and Dine on the Line,” through which people who visit certain stores and restaurants near rail construction sites can receive discounts.

A second look

HART leaders also must answer to local government representatives. Honolulu Mayor Kirk Caldwell, for example, is keeping close tabs on the project.

In July 2015, Caldwell hired transit-rail consultant Michael Burns to provide additional oversight of HART’s plans. Previously, Burns served in executive roles at several U.S. transit agencies, including the Southeastern Pennsylvania Transportation Authority, San Francisco Municipal Transportation Agency and Santa Clara Valley Transportation Authority.

“We need to make sure that taxpayer funds are spent responsibly. With a project of this size, it’s always good to have checks and balances in place,” Caldwell says. “I know a fresh set of eyes to review and provide oversight will benefit the city, HART, and the city council.”

Pressing on

While Caldwell understands citizens’ concerns about the project’s costs, he maintains that the traffic-reducing benefits ultimately will outweigh any snags encountered along the way.

“I believe [the rail project] is worth fighting for because I know that when it comes to traffic congestion, Oahu is at a breaking point,” Caldwell says. “If you ask any Oahu resident who has been around for more than five or 10 years, you will hear how our freeway and streets have changed.”

Despite the delays, HART has achieved several project milestones, including the completion of 5 miles of guideway in December 2015. Pending continued progress, the city may opt for a “soft opening” of the system’s first 10 miles in 2018. And, on the funding front, the Honolulu City Council late last month voted to extend Oahu’s general excise tax by five years, which would help cover the cost increases.

Still, as the project proceeds, the community is bound to feel some adverse traffic impacts due to construction — which is why it’s so important to keep residents informed about the rail system’s future benefits, Grabauskas says.

“We’re constantly trying to let people know why we’re doing what we’re doing and helping them to understand,” he says.

Email questions or comments to daniel.niepow@tradepress.com.

[Editor’s note: The City and County of Honolulu, which encompasses all of Oahu, has a population of more than 991,000 residents. The urban core of Honolulu, which is referred to as “Urban Honolulu” by the U.S. Census Bureau, has a population of about 350,000.]

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