Thursday, March 28, 2024
Hawai'i Free Press

Current Articles | Archives

Saturday, September 1, 2012
Honolulu Rail Cost Escalation
By Panos Prevedouros PhD @ 2:44 AM :: 10562 Views :: Maui County, Education K-12, Energy, Environment

Honolulu Rail Cost Escalation

by Panos Prevedouros, Fix Oahu

It is important to understand how much costs escalate in megaprojects. All these costs in bond-financed public projects are to be borne by the taxpayer. Oahu has fewer than 400,000 taxpayers so the possibility of a twelve billion dollar bill for a long rail line presents a staggering liability. Over $30,000 per taxpayer.

In 2005 Mayor Mufi Hannemann and his supporters went to the Legislature and asked for a temporary (20 year) 1% tack on to Hawaii's 4% general excise tax in order to develop a large rail system for an approximate cost of $2.7 Billion. The Legislature approved a 0.5% tack on to the GET in hopes that Federal Transit Administration and other taxes will cover the total.
Here is the letter to The Honolulu Advertiser by Mayor Mufi Hannemann promising that the 20 mile system will cost $3 Billion.

In 2008 General Elections there was a City Charter Amendment asking the city to install a steel-on-steel fixed guideway system. The cost of the 20 mile system had grown to $4.6 billion and almost $1 Billion was the contingency funds. TheBus funds were not touched in 2008.

In 2010 outgoing governor Lingle procured a financial analysis report for the rail that she had supported, in light of the escalating costs of rail and the 2008-2009 fiscal crisis. IDG, a reputable financial and risk analysis consultant based in Washington, D.C., estimated that the 20 mile cost will be more likely $7.2 Billion.

Despite these facts, Governor Abercrombie signed off on the State EIS and Mayor Carlisle dismissed the financial report as "an anti-rail tirade."

In summer 2012 the City submitted its final application to the FTA for a Full Funding Agreement. In it, the cost of the 20 mile line has grown further to $5.17 Billion but contingencies have been reduced to about $600 Million and another $150 Million is "borrowed" from TheBus fleet funds. In other words, the 2012 cost estimate would be $5.7 Billion if they did not fudge the amounts and kept them at the 2008 level.

In May 2012 Councilmember Kobayashi asked HART to estimate the cost of the full 34 mile system from West Kapolei to the UH and Waikiki.
HART's response was $9.03 Billion.

If we apply IDG's cost escalation of the 20 mile system to the 34 mile system we get $12.6 Billion. Hanneman's rail has ballooned from $3.6 Billion to $12.6 Billion!


Rail was a bad idea at a cost of $3 Billion. Now that the likely cost is three times higher, the choice is clear. People have made their choice quite clear by handing both mayors Hannemann and Carlisle their walking papers.

 

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT