Rail project shutdown will costs Honolulu millions
HONOLULU -- A rail project shut down by court order will cost Honolulu more than $114 million, according to the head of the Honolulu Authority for Rapid Transportation.
According to the Honolulu Star-Advertiser (http://is.gd/u2xzkU), Daniel Grabauskas told the City Council on Wednesday that the authority bases the figure on contractor delay claims, change orders and new expenses tied to the court-ordered construction shutdown of the rail project.
He also said that there likely will be more costs in the future because the authority estimates that each month of delays will cost an extra $7 million to $10 million. The city has hired a new "claims management consultant" to help control the unexpected costs, according to a report filed with the FTA during the summer.
The city stopped the project after the Hawaii Supreme Court ruled Aug. 24 that the State Historic Preservation Division failed to complete an archaeological inventory survey for the entire 20-mile rail route.
Grabauskas notified the City Council by letter on Tuesday that the court ruling will likely cost the city an estimated $64 million to $95 million in delay expenses in the months ahead. The city has now accelerated work on the archaeological survey in an effort to quickly restart construction, but the survey likely will not be finished until the first quarter of next year.
Grabauskas said the rail financial plan includes a $644 million contingency fund to cover unexpected costs.
However, Council Budget Chairwoman Ann Kobayashi described recent events as "really worrisome." She questioned Grabauskas about the possibility that HART might run out of money and would have to draw on a $450 million line of credit the city established to cover any project cost overruns or cash shortfalls.
Mayor Peter Carlisle and HART officials have said repeatedly they do not plan to draw on the $450 million. But Kobayashi said she is concerned city taxpayers will eventually foot the bill if the project runs out of cash and goes into debt. Grabauskas said that is a possibility.
"We hope never to have to tap the funding," Grabauskas said.
"I know. We do, too," Kobayashi said. "The city taxpayer hopes more than you."