The Federal Transit Administration has informed Honolulu Area Rapid Transit (HART) that it will not help cover cost overruns associated with the agency’s 20-mile rail line. The project was originally supposed to cost about $5.1 billion, which was already ridiculously expensive, but now is projected to cost at least $8 billion and possibly as much as $11 billion.
The FTA has a long-standing policy that it won’t help cover cost overruns (a policy that is sometimes overturned by Congress). But in this case, the FTA has added a new twist. In light of the cost overruns, HART has proposed to build just part of the project, leaving uncompleted the five miles of the line that would have attracted the most riders. But the FTA says that, in that case, it won’t be giving HART $1.55 billion that the agency is counting on. That means HART won’t even be able to complete the part of the project that it planned.
HART says it is examining its alternatives and hopes to have a viable proposal before FTA by the end of the year. But it probably isn’t looking closely at the most reasonable alternative, which is to completely abandon the project. While it has already sunk several billion into it, abandoning it would save taxpayers billions more in construction costs not to mention an estimated $126 million a year in operating costs. Since the city of Honolulu spends less than $185 million per year operating about 100 bus routes, $125 million is a phenomenal amount of money to spend on just one rail route.
The Federal Transit Administration’s latest estimates suggest that the Honolulu rail line now under construction could cost nearly $10.8 billion, or more than twice the $5.1 billion originally promised. That’s the “highest possible cost” calculated by its estimation process, while the “likely range” is $7.2 to $8.0 billion. However, two years ago, the highest possible cost was estimated to be $7.6 billion, which is right in the middle of today’s likely range.
Any of those numbers are drastic overruns. Typically, transit agency officials have denied there is an overrun. But now they are proposing to not build the last five miles of the rail line into downtown Honolulu. Since they started construction in middle of farm lands 20 miles from downtown, they would truly have a rail line going from nowhere to hardly anywhere.
Even if it doesn’t finish the line, the city has already purchased and may continue to purchase land in the downtown area for the rail line. This creates uncertainty among property owners. Even further uncertainty is generated by reports of shoddy construction. Meanwhile, the FTA has hinted it might withhold some of the federal government’s share of funding if the line isn’t completed.
The Honolulu city auditor’s review of the Honolulu Authority for Rapid Transportation (HART) found numerous problems, including the use of obsolete and unreliable decision-making tools, failure to analyze major changes in the planned rail line, and leasing more office space than the agency needs. The rail line HART is constructing is already 25 percent over budget, and based on the problems found in the audit, the auditor “anticipate[s] additional cost overruns.”
Rather than fix the problems, HART officials chose to attack the messenger, claiming that the audit (which had been requested by the city council) was “politically motivated.” When the auditor shared a confidential draft of the audit with HART, HART shared it with unauthorized people, attempted to intimidate the auditors, and went to the press to attack the auditors before the audit was made public.
Not many people believe the agency’s attack on the city auditor. Honolulu’s mayor asked the the chair of HART’s board and another one of its board members to resign, perhaps hoping to use them as scapegoats for the project’s failings. Yet shaking the top of the agency won’t help fix the fundamental problems, which are that a $6 billion construction project is really beyond the region’s needs or the agency’s abilities.
The city and state officials who promoted construction of Honolulu’s rail transit line now admit that they don’t know how they are going to pay for the cost of operating that line. Between 2019, when the first part of the line is expected to open for business, and 2031, those costs are expected to be $1.7 billion, or about $140 million per year. In 2011, the annual operating cost was estimated to be $126 million a year.
Honolulu has about a hundred bus routes, which cost about $183 million to operate in 2013, or less than $2 million per route. The rail line will therefore cost about 70 times as much to operate as the average bus route.
Officials project that rail fares will cover less than a third of operating costs, but that’s probably optimistic. They are predicting 116,000 daily riders in 2030, which works out to about 5,800 riders per mile. That’s more than the number of riders per mile carried by the Chicago Transit Authority, Atlanta’s MARTA, or the San Francisco BART system–and considerably more than carried by heavy-rail lines in Baltimore, Cleveland, and Miami.
Last December, Honolulu’s rail transit project was estimated to be $700 million over budget. Now they are saying it is closer to a billion. Never fear, however: the state legislature just agreed to extend a half-percent excise tax, which was supposed to expire in 2022,
indefinitely for five years to pay for the rail and its cost overruns.
Due to many sinkholes and other soil problems, the elevated Honolulu rail line looks to be a bumpy ride.
The legislature was reluctant to do so, but was persuaded after heavy lobbying by Honolulu Mayor Kirk Caldwell. Coincidentally, the Honolulu Star-Advertiser reports that rail contractors and subcontractors have donated well over half a million dollars to Caldwell’s political campaign funds. This doesn’t include sub-subcontractors, which are so numerous that even the transit agency doesn’t know how many there are, much less who they are. (The story is behind a paywall, but it says prime contractors and their principals and employees have given the mayor nearly $324,000 while subcontractors have given nearly $243,000.)
To almost no one’s surprise, the Honolulu Authority for Rapid Transportation (HART) has announced that the rail project it is building will cost at least 10 to 15 percent more than estimated, while the revenues from the general excise tax that is supposed to pay for the project are, so far, $41 million less than expected.
A 10 to 15 percent cost overrun isn’t large as rail projects go, but this is an expensive, $5.2-billion project to start with, so 10 to 15 percent is $500 million to $780 million. HART officials blame the cost increase partly on the lawsuits that, unfortunately, failed to stop this waste of money, but even they say that the delays only increased costs by $190 million. Since the project isn’t even supposed to be completed until 2019, there is plenty of time for overruns to mount up to be far greater than projected today.
Rather than make the sensible move and simply cancel the project, the city is debating how to pay for the overruns. One idea is to divert to rail $200 million in federal money that is now being spent on Honolulu buses. Another idea is to extend the excise tax, which was supposed to expire in 2022, for a much longer period of time. Either way, they would take money that would have been spent on something productive and devote it to a complete boondoggle.
The Ninth Circuit Court dismissed objections to the plan for Honolulu’s 20-mile, $5 billion rail line. Though proponents call it a high-capacity rail line, in fact it uses trains whose capacity is actually lower than light-rail–which term really means “low-capacity rail.”
A line with three-car light-rail trains can move about 9,000 people per hour. The maker of the Alstom trains Honolulu wants to run claims they can move 15,000 people per hour, but that’s at crush-capacity. At crowding levels that Americans will accept, the capacity is probably less than 7,000 people per hour.
By comparison, the Antiplanner estimates double-decker buses can move 17,000 people per hour on a city street and more than 100,000 people per hour on a freeway lane. Buses are faster too: Alstom trains in other cities average just 20 mph.
A county judge says the California high-speed rail project violates the law approved by voters in 2008. But he won’t decide to issue an order halting the project until after another hearing, for which a date hasn’t yet been set.
The Reason Foundation’s Adrian Moore and Antiplanner friend Wendell Cox discuss California high-speed rail.
The Contra Costa Times lists many of the ways the project as planned today violates the 2008 ballot measure: the construction cost has doubled; the projected ticket prices have gone up; the speeds are slower; and the projected opening date is already nine years behind schedule. But the judge only rules that the project had failed to complete its environmental review and find funds to finance the entire project, not just a few miles in the Central Valley.
One of the intriguing things about rail transit is how much more the CEOs of rail transit agencies get paid than those of bus-only agencies. Yet that high pay comes with a high risk of failure and disgrace, as it is much more difficult to build and run rail lines than to simply manage bus service.
Case in point: Dan Grabauskas, CEO of Honolulu’s “rapid transit authority” and the highest-paid city official in Honolulu. What did Grabauskas do to merit this position?
It turns out that his main qualification is having helped run the Boston rail system into its present deteriorated condition. In 2009, Grabauskas resigned from that position in disgrace. Some claim he was forced out by a Democratic governor for the sin of being appointed by the previous Republican governor, yet there is no doubt that Boston’s rail lines were in terrible shape, with frequent delays, at least two recent crashes (including one blamed on rusty signal wires that killed a train operator), and miserable customer service.
Opponents of the $5 billion Honolulu rail project prevailed in their lawsuit charging that the city failed to consider a full range of alternatives before deciding to build rail. A federal judge ruled last week that the city was “arbitrary and capricious” in selecting rail and violated the National Environmental Policy Act in failing to present more alternatives in the environmental impact statement.
Construction on the rail line had already been stalled by a previous lawsuit that found that the rail project failed to comply with state historic preservation and burial protection laws when it failed to complete an archeological inventory survey for the 20-mile route before starting construction. Instead, it had planned to do the inventory just ahead of each step of construction.
Basically, the city let construction contracts and began construction prematurely because it wanted to commit funds before voters had an opportunity to stop the project. Voters will get their chance tomorrow, when former Hawaii Governor Ben Cayetano, who opposes the rail project and was one of the plaintiffs in the recent lawsuit, is on the ballot for mayor of the city.