Honolulu rail is digging a deeper hole as board members worried about the current uncertainties crowding the public works project, which is the company’s largest-ever executed.
The city missed its latest deadline two weeks ago, and so far, there hasn’t been a clear reward for going ahead with a private-public partnership.
The deal has been pursued for the past two years, as board members have continued to reassure the public that this is the best way to spend their money.
The deal was originally supposed to be implemented in September, but that date has come and gone.
Terrence Lee, Vice Chairman of the Honolulu Authority for Rapid Transportation Board, said that we have to be prepared for this type of partnership not to be successful on Thursday.
Huge Shortfall Seen as a Result of Pandemic
There has been a shortfall of $450 million in the project ever since COVID first started to affect the local economy. Currently, costs are estimated to reach as much as $9.1 billion.
Most local economies are reeling from the current pandemic, even as lockdown restrictions begin to ease. There are plenty of people struggling to find a way to pay rent, overhead, and bills as businesses have been forced to close for months now.
The unpredictable economic climate means that many have lost more than they anticipated. This might cause a gap between existing funds and current costs.
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Lee continues by wondering how HART is going to get out of this financial hole that they have found themselves in.
Legislature Not in it For the Third Time
Lee says that he’s not feeling optimistic about the idea of Legislature providing a bailout for the rail for the third time. He is wondering whether the issue will have to sit on ice until a new mayor is elected.
Toby Martyn, Board Chairman of HART, says that there haven’t been any serious conversations about how to bridge the gap for the shortfall as far as he is aware.
Other than the legislature stepping in, he says that the only way to make it up would be for the city to chip in and cover the additional costs.
Government Might Be There in the End
There is a small chance that the government is slated to pass another large-scale relief bill for states and cities nationwide. It would be similar to the CARES act, and it would include funding for capital projects like the rail construction and management.
If the deal still went through and was half publicly funded, half privately funded, then a private company would build the final 4.1 miles of transit line and the eight stations that lead to the Ala Moana Center.
The work that the private firm would be responsible for is estimated to cost $1.4 billion alone.
While the board doesn’t oversee the joint development, it still meets to discuss the process regardless. Hopefully, by the end of the day, it will be clear what direction to take it.