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The Honolulu Advertiser
Posted on: Saturday, January 9, 2010

Honolulu's rail costs put state at financial risk, governor says


By Sean Hao and Gordon Y.K. Pang
Advertiser Staff Writers

Hawaii news photo - The Honolulu Advertiser

Gov. Linda Lingle

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ARCHITECTS ON TRANSIT PLANS

The Hawai'i chapter of the American Institute of Architects will provide a presentation on rail from 9 to 11 a.m. Jan. 18 in the state Capitol auditorium.

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Honolulu should consider adjustments to its planned $5.3 billion elevated commuter rail line including building a portion of it at street level to save money and avoid putting more burden on taxpayers in a down economy.

That was the message from Gov. Linda Lingle yesterday as she leveled her strongest criticism to date at the rail project championed by Mayor Mufi Hannemann.

Lingle said she will host a Jan. 18 forum on alternatives to the elevated rail line and will discuss the financial plans directly with federal transportation officials while in Washington next month.

While it is primarily a city project, Lingle said the financial failure of the largest infrastructure project in state history could put all Hawai'i residents at risk.

"If a project like this fails financially, and 80 percent of the people are here on O'ahu, the state is going to be impacted, and the state is going to have to step in at that point to protect the credit rating of the state and of the city. Because otherwise it would be very difficult for anyone from Hawai'i to be selling bonds," Lingle said at a news conference.

Hannemann said Lingle was creating new hurdles for the planned 20-mile rail line from east Kapolei to Ala Moana.

"It's amazing that, in the absence of any state project that would create the thousands of jobs that the rail transit project will, that the governor of this state continues to throw up roadblocks, especially since she championed elevated rail during her first year in office," Hannemann said in a written statement.

Lingle said she hopes to spur discussion of alternatives by providing the Jan. 18 public forum for members of the American Institute of Architects' Hawai'i chapter to present their views on transit. The group is advocating flexible train technology that would allow the planned rail line to be built at ground level in Downtown Honolulu .

Lingle's statements follow a report in The Advertiser yesterday on recently released Federal Transit Administration documents in which the agency raised concerns that the $5.3 billion cost of Honolulu's commuter rail line could outstrip the city's ability to pay for it.

"A major concern is the cost of this project in today's atmosphere and what I see as difficulty for our community in the years ahead to get our revenues on track," Lingle said. "People might say it's a city project, but it affects 80 percent of the state. And to knowingly go into a project that is going to burden people financially for a generation to come, again, a project that the community perhaps cannot afford, I think there needs to be adjustment.

"I don't know another project except this one that has made no adjustment from a pre-recession to a post-recession proposal."

The American Institute of Architects' Hawai'i chapter estimated "the difference per mile of an above-ground to an at-grade (street-level rail line) at $200 million per mile difference in costs. So if you just did it for half the distance, say 10 miles out of 20 miles, that's a $2 billion savings. And again, that's the kind of adjustment you might want to have to make because of the changing economy and the fact that people can't stand more tax burden at this time," Lingle said.

CONCERNS RAISED

The city this week acknowledged the federal government's concerns about the project's finances following an economic- related decline in tax collections needed to pay for the project. However, the city maintains that lower near-term tax collections will be offset by lower construction costs, a rebounding economy and more than $1 billion set aside to handle contingences .

The city also plans to divert more than $300 million in federal funds for buses to pay for the train system.

The city maintains that a ground-level train would operate at slower speeds and generate lower ridership and higher long-term costs.

However, groups such as the AIA, Kamehameha Schools and others contend a rail system built at least partially at grade would cost less and have less visual impact.

Lingle said she felt compelled to provide the AIA with a public forum after recently viewing their presentation.

"It had a big impact to me and I found it very compelling because they are pro-transit, they are pro-development, they make a living in development and yet they have specific concerns with the plan as it is currently being proposed by the city," Lingle said. "I gave a lot of credence to them because they had nothing to gain by coming forward and they had a lot to lose because many of them do get city projects.

"So for them to step forward like that put their livelihood on the line from some people's point of view I felt took a lot and so I wanted to make certain that I gave them an opportunity to express themselves to me."

FEDERAL ROLE

The AIA presentation is separate from public hearings the state plans to hold once the city receives federal permission to release the rail project's final environmental impact statement.

That document will need to be approved by Lingle before the city can push ahead with plans to break ground.

However, Lingle has said she'll conduct a thorough analysis of the study to ensure that the project's financial plan is feasible and that alternatives were adequately considered.

Part of that process will include meeting directly with federal department of transportation officials during a trip to Washington, D.C., in February, she said. Among other things, Lingle wants assurances on how much money the federal government will give the city to help pay for the train. The city is counting on $1.55 billion in federal funds.

"Everything we know about it from the federal DOT is what we've heard via the city," Lingle said. "And I want to talk directly to them I want to know what do they think of the financing plan, what do they think about the alternatives that the AIA has put forward. I'd also like to ask them about the (federal) subsidy amount."