The Financial Accountability for Rail Mass Transit Association opposes the award of any new contracts for the Honolulu High-Capacity Transit Corridor Project while the federal investigation and state and city audits are ongoing. A recent Wall Street Journal article leaves the impression that the project faces — at best — an uncertain future.

There also is the issue of construction flaws in columns and shafts pointed out in a “whistle-blower” lawsuit.  Failure to address this could result in a disaster during operations and the loss of lives. Despite all this, indications are that the city administration and the Honolulu Authority for Rapid Transportation are anxious to award the city center (i.e., Middle Street to Ala Moana Center) guideway and stations construction contract this year.

Cost overruns and change orders in the past were largely due to contract awards long before they were needed. We suspect they were rushed for the benefit of developers eager to profit from rail and also to deflect any opportunities for potential changes to previous mayors’ plans.

HART CEO Andrew Robbins is implying that contracting for a public-private partnership city center award should be going forward, an unwarranted action even as the state is not releasing funding for invoices being scrutinized by the federal government.

Will the city pursue more funding even though earlier ill-conceived plans and analyses led toward fiscal disasters?  Past examples include deliberate deception by some members of the Honolulu City Council concerning the federal positions on rail technology and having to re-plan the guideway alignment when it was found that the Lagoon Beach Park station would be within the airport’s safety zone for its diagonal runways.

A recent example is the likely added cost for a makai entrance to the Mokuola Street station in Waipahu following public complaints. It has always been a case of “rush ahead” rather than “plan ahead.”

Major consequences may result from the ongoing investigations, such as: termination in its entirety; truncation at Middle Street; loss of $744 million in remaining federal funds and required repayment of an already received $806 million; and possible criminal indictments involving individuals responsible for previous contract awards.

Awarding any contract during this calendar year could lead to lawsuits from prematurely awarded contracts that will never be implemented. Hawaii taxpayers must not be subjected to further penalties as a result of poor planning, such as the recent one for $160 million to Hitachi Rail Italy because of delays resulting from early awards and poor fiscal management.

“Rail must be done but it must be done right.”

This is definitely a time to be “safe rather than sorry.” We must, however, consider the consequences:

1. Termination of the total project would result in a loss to local taxpayers of about $6 billion ($2.9 billion in funds expended or committed, $2-plus billion to remove existing facilities and the guideway, and the $806 million to be returned to federal authorities).
2. Truncation at Middle Street would not only require repayment of federal funds but also result in very low rail ridership levels and a need for a “relook” at bus rapid transit through downtown Honolulu, a plan that would require dedicated traffic lanes.
3. The uncertainty of actually being able to go forward with newly awarded contracts if either of the above occur and federal punitive actions are taken.

With a project delayed for full implementation from this year to late 2025 or 2026, there is no urgency for an action that might result in future cost overruns unacceptable to island taxpayers and commuters. It will be best to place the rail project “on hold,” take the time to digest the results and possible consequences of the investigations, and then have public hearings on the best way to proceed with what — like it or not — is a much-needed transit system.

Rail must be done but it must be done right to save it from falling off a fiscal cliff.

The Financial Accountability for Rail Mass Transit Association recommends the following course of action on the rail project:

1. An immediate pause in development until ongoing federal and state investigations and a forensic audit are completed, fully evaluated, and the results made public.
2. A comprehensive examination of alternatives in routing and technology for the project’s development is completed and evaluated for potential future implementation.
3. Direction by the city to HART that no contract request for proposals for any element of the rail project be issued until further notice.

If HART claims its autonomy cannot be subject to terms dictated by the city, steps leading to termination of its charter should be taken.