The start of construction on Honolulu's planned $5.3 billion commuter rail project could be delayed several months as Gov. Linda Lingle examines details of the city's financial plan which she said appear "shaky at best."

Lingle said yesterday she could not approve Honolulu's rail line based on current information about the funding for the project. She also announced plans to conduct an independent analysis of city tax revenue forecasts that are the basis of the project's financial plan.

The city will eventually need the governor's approval to go forward with the 20-mile East Kapolei-to-Ala Moana elevated train.

"If I had to sign off now, I couldn't based on what I know from the federal government about the financial plan because they basically say this can't be sustained," Lingle said.

The comments, which came following a luncheon of the Republican National Committee winter meeting at Hilton Hawaiian Village, signal that Lingle's planned review of the project could be lengthy. That means that even if Lingle ultimately signs off on the project, construction couldn't occur for months.

"The governor is wrong about the financial plan not being good enough to proceed" with the project, Mayor Mufi Hannemann said in a statement yesterday. "She seems confused again about the city's rail project and the process, and appears to be mixing pineapples and macadamia nuts."

Groundbreaking on the elevated commuter rail was supposed to take place in December, but has been indefinitely delayed by an ongoing federal review of the project's final environmental impact statement. That statement, once it's released, will need to be approved by Lingle before the city can break ground.

The city wants Lingle's approval to come relatively fast. However, Lingle has said she'll conduct a thorough analysis to ensure that the project's financial plan is feasible and that alternatives were adequately considered.

Hannemann yesterday questioned the governor's authority to reject the environmental impact statement based on financial reasons. He said the financial plan is just a small part of the impact statement and no state has ever required approval of a financial plan in its acceptance of an impact statement.

FEDERAL MEMO

Lingle yesterday based much of her concern on a recently disclosed memo from the Federal Transit Administration to the city that raised questions about the city's ability to pay for the train. The Oct. 7 memo also warned the city that its financial plan may not be sufficient to allow the project to proceed into the final engineering phase early this year.

The FTA also recommended that the city obtain an independent forecast of transit tax revenues from a source familiar with the Hawai'i economy. The tax revenue estimates used in the city's most recent publicly available train financial plan were prepared by Parsons Brinckerhoff, which has a city contract to conduct preliminary engineering and environmental impact studies.

Lingle yesterday said she wants an independent firm or non-governmental organization to review city transit tax forecasts before deciding whether to approve the project. She strongly urged the City Council to do the same.

"We'll start to look around for people who could be objective to just tell the people of Hawai'i that we're not involved in this, but here's how we view the situation," she said. "I think the City Council should demand that kind of analysis, they should be paying for an independent analysis themselves."

Yesterday's remarks were the latest round in an ongoing public debate between Lingle and Hannemann about the feasibility of the project. Earlier this week, Hannemann accused the governor of being anti-rail for political reasons.

The city has acknowledged FTA concerns that the rail project's cost could outpace the revenue lined up to pay for it. The concerns are driven partly by a decline in transit tax collections following the state's economic downturn.

USING BUS MONEY

The city expects to offset lower-than-anticipated transit tax revenues by relying on increased federal funding and by diverting $305 million in federal money intended for TheBus. City officials also hope that lower tax revenues will be partially offset by lower construction costs.

Council Chairman Todd Apo yesterday said several council members plan to meet with federal transportation officials to discuss financial and other concerns about the project during a trip to Washington, D.C., in March.

Apo said the council will wait until the city releases the project's final environmental impact statement before deciding whether the financial plan and tax revenue forecasts are feasible.

"Until we get the final EIS and financial plan, and are able to understand what's been done and what's not been done ... I don't think anyone can make any judgment about it," Apo said. "Obviously there's a level of back and forth (between Lingle and Hannemann) that we'd all prefer it not to be there.

"I don't think it's a reflection on the project. There are some legitimate questions in the back and forth that need to be dealt with by the project, but it's not a reflection of the project being bad or going the wrong way."