Feds Approve Honolulu Rail Recovery Plan, Will Release $125 Million

The Federal Transit Administration has approved the Honolulu rail project’s recovery plan and will release $125 million of the $744 million it has withheld for years, city officials announced on Friday. 

A second release of $250 million is contingent on the successful award of a contract for the city center guideway and stations, the FTA told HART CEO Lori Kahikina in a letter. That contract is expected to be awarded in 2024. 

The decision came more than three months after the city submitted its latest plan to rescue the troubled rail project, proposing a shortened route that would trim the transit line to about 19 miles and eliminate its two easternmost stations. The truncated rail line would stop at Halekauwila and South Streets. The plan also temporarily defers the construction of a Pearl Highlands parking garage, which was meant to serve future central Oahu riders.

“Based on the information the Honolulu Authority for Rapid Transportation (HART) provided, the FTA finds the Plan sufficient at this time to continue to move forward,” FTA Regional Administrator Ray Tellis wrote. “At the same time, the FTA notes that significant uncertainties for the final project construction cost will remain until the City Center Guideway and Stations contract is executed.”

The Honolulu Authority for Rapid Transportation has frequently tussled with the FTA over the years as the multibillion-dollar project repeatedly encountered skyrocketing costs and budget shortfalls.

HART submitted at least five versions of a recovery plan between 2016 and 2019, and it didn’t secure an FTA approval until September 2019. Even then, the FTA did not agree to release rail’s remaining $744 million to Honolulu until HART made more progress to keep the project on budget.

The latest plan, which was submitted in early June, assumes the largest infrastructure project in Hawaii’s history will collect around $6.4 billion in GET funding, $1.1 billion in state TAT funding and $488 million in city TAT funding.

FTA officials approved the plan without revisions. It represents the first time the federal agency has released rail funds since 2017.

At a press conference at Honolulu Hale on Friday, Mayor Rick Blangiardi said it is a “joyous and a historic day for us.”

The rail project has lost credibility because of its “dysfunction” over the years, the mayor acknowledged. There have been constant cost overruns, delays, reports of a federal investigation and plans for a private-public partnership that fell apart.

“The kind of discord that had gone on – the former CEO was fired, the P3 (failed), a lot of other things were impacting their perception of Honolulu’s ability to do this project,” he said. “It could not have been at a lower point.”

The mayor credited Kahikina and her team for turning it around.

“This was an unprecedented challenge for her and she rose to the occasion,” He said. “I could not be prouder or more grateful.” 

Blangiardi said he also owes a “tremendous debt of gratitude” to HART Board Chair Colleen Hanabusa and thanked Honolulu City Council Chair Tommy Waters for his assistance. 

Kahikina said on Friday that the total cost of the project remains the same for now, at some $10 billion. However, she said supply chain issues are causing delays and therefore may increase the cost.

HART and the mayor still want to build the rail to Ala Moana, and even to the University of Hawaii at Manoa, in the future, officials said. But in the meantime, construction will proceed in the Dillingham area, which will cause some disruptions to traffic, Kahikina said.

“It is going to be painful for the community, businesses, and residents,” she said. “But it’s a necessary evil.”

In the meantime, HART is running through emergency response scenarios to ensure the rail is safe to ride, including drills that simulate a shooting and a train derailment.

The first section of the rail is currently slated to open in the first quarter of next year, but Kahikina said safety issues that arise through those drills, and also cracking problems with the rail supports – called hammerheads – could further delay the opening.

“We are not in hurry,” Kahikina said. “Safety is paramount to us.” 

At the press conference, Hanabusa said the rail is an investment in the future.

“The project is really not for our generation in this room,” she said. “It is for the generations to come. It is going to redefine how our people live in the future.”

In a statement, U.S. Senator Brian Schatz, who chairs the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, applauded the news.

“We still have a long way to go, but this is an important step that recognizes the work HART and the city have done to provide more accountability and get this project back on track,” he said. “I will continue to work with our federal and state partners to make sure that we complete this project for the people of Honolulu.”