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The Honolulu Advertiser
Posted on: Thursday, June 23, 2005

Decision to cancel bus cards disputed

By Robbie Dingeman
Advertiser Staff Writer

City Council members yesterday questioned whether the city administration scrapped the smart-card program for TheBus prematurely and should have allowed the pilot project more time to work.

Last month, the city administration canceled a contract with Royal Contracting Co. after paying the company $1.1 million of a $2.2 million contract to set up a program that allows bus riders to pay their fares with a debitlike card.

City officials said the program had equipment problems and missed some deadlines but was canceled mostly to save money.

Transportation Services Director Ed Hirata told the council Budget Committee that continuing the project would have required hiring three more staffers and purchasing additional equipment at a cost of at least $200,000 a year more.

But council member Barbara Marshall questioned the wisdom of pulling out last month after spending more than $1 million. "We're wasting a million dollars to save $200,000?" she asked.

Later yesterday, Mayor Mufi Hannemann said he believed that the system wasn't working well enough to invest more money in it when he rode the bus Feb. 16 and the onboard card reader was broken.

"I personally experienced it not working," Hannemann said. "People were getting on the bus for free."

The smart cards were intended to eliminate cash and speed up boarding as well as provide a way to track where buses were needed the most and when. The contract called for the project to be completed by July.

Hirata said he thought the system had potential but the decision to cancel was made "above our department."

Marshall said she heard that the technical problems had eased and that the system was running well during the last month and a half before the contract was canceled May 16.

Hirata said that was true. He said the city issued 1,600 cards — mostly to city workers and workers at 18 private companies.

Royal Contracting vice president Leonard Leong, who has served as engineer for the project, was traveling out of the country yesterday and was unavailable to comment.

The city contract paid for 50,000 cards, so Hirata said they still have at least 48,000 cards, purchased at a cost of $2.80 each, totalling more than $130,000.

Council member Romy Cachola also asked why the city pulled out after spending half the money. "I cannot understand the logic of that," he said.

Cachola said the city needs to come up with a better explanation of what went wrong for the public. "It doesn't look good on us," he said.

Hirata said by canceling the contract, the city also will save the other $1.1 million that would have been spent. "Any money that you don't spend, you save," he said.

He said the city is mailing letters to smart-card holders this week telling them the program ends on July 1 and their cards won't work anymore.

Hirata said the card readers would be removed from the 525 buses in which they were installed and the city will look into selling the machines before the technology becomes outdated. He said pulling them out of the buses is part of a plan to "try to get whatever salvage value we could get."

Hannemann said he would have continued with the program if it could have been done efficiently.

"I think we made a prudent decision," he said.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.