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Cost Overruns Plague $9B HI Light Rail

Wednesday, January 23, 2019

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The first of four audit reports regarding the Honolulu Rail Transit Project has been released, with the state auditor’s office citing that the Honolulu Authority for Rapid Transportation’s performance on the 20-mile, $9.2 billion project was something over-promised and under-delivered.

Costs associated with the light rail project have increased from $5.1 billion in 2012. The project is also six years behind schedule.

Project Details

The first phase of the Honolulu Rail Transit Project is to connect Kapolei to Aloha Stadium, with an opening date currently slated for 2020, and the second phase, running from Kapolei to Ala Moana Center, is slated to open in 2025. The line is only currently halfway complete.

Musashi1600, CC BY 3.0 us, via Wikimedia Commons

The first of four audit reports regarding the Honolulu Rail Transit Project has been released, with the state auditor’s office citing that the Honolulu Authority for Rapid Transportation’s performance on the 20-mile, $9.2 billion project was something over-promised and under-delivered.

Construction on the 4.3-mile section through downtown Honolulu, which is suspected to be one of the more difficult parts of the project, has required the contractor selection process to start over, which started in September 2017 and is expected to take 18 months. The first significant contract for that section, awarded at $400 million in May 2018, was for moving utilities.

Auditor’s Report

According to the audit, city officials sought to quickly award contracts a decade ago, citing concerns over an increase in construction costs once the economy recovered from that year’s recession. Officials were also concerned that state lawmakers would tap into funding for the project if the money went unused.

The first $483 million construction contract went to Kiewit Pacific Co. in November 2009, covering the first 6.5 miles of elevated track. The project’s final environmental impact statement was not published until the summer of 2010, and the Federal Transit Administration didn't grant approval for breaking ground until February 2012. (The FTA is funding $1.5 billion of the project’s cost.)

Honolulu Authority has already had to pay Kiewit $108 million in penalties for changes in plans regarding that first contract. The authority also failed to keep relevant parties informed of schedule changes and cost overruns in a timely manner.

“Over-promise, under-deliver,” the state auditor’s office concludes in its report. “It has been the hallmark of the Honolulu Rail Transit Project’s near-decade long, stop-and-go journey.”

Andrew Robbins, CEO of the Honolulu Authority for Rapid Transportation, noted that since January 2017, the Authority has implemented a financial cost tracking system, as well as established a risk asset and management system. There is also a system to manage construction change orders.

The audit was originally ordered by Hawaii lawmakers in 2017, when raising another $2.4 billion in taxes was approved to provide further financial assistance during a shortfall.

   

Tagged categories: Auditing; Government; Infrastructure; NA; North America; Program/Project Management; Project Management

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