HART Looking For Private Partners to Complete Last $1.6B City Center Rail Segment

May 14, 2018

HART Board briefed on Public-Private Partnership for final City Center setment
Credit Wayne Yoshioka

The Honolulu Authority for Rapid Transportation – HART – wants to partner with private businesses to complete and sustain the city’s rail system. HPR’s Wayne Yoshioka reports.

   

 

E&Y Consultants, Nicole Doheny and Tuyen Mai, briefed HART members on P-3 concept of Design-Build-Finance-Operate-Maintain concept
Credit Wayne Yoshioka

More than a decade ago, Honolulu’s elevated fixed guideway rail system was estimated to cost 4.6 billion dollars.  Today, that price-tag has nearly doubled, and the Honolulu Authority for Rapid Transportation – HART -- is considering a public-private partnership or P-3 to complete the final City Center segment.  Tuyen Mai is a paid consultant who briefed HART on the commercial viability of a P-3.

 

“In construction, contracting typically there is a retainer between 5 ad 10 percent. But, you would only disperse that at the end upon completion.  Here, we’re talking more about 30 percent.  When you have 30 percent of their money that you hold back, it changes behaviors to make sure you get construction completed on time and on budget.”

 

HART is also considering awarding a 20-year contract for operations and maintenance of the entire rail system, once it’s completed.  That would require the new contractor to assume full responsibility of the entire system – the guideway, track and rail cars.   Nicole Doheny, another paid consultant, says a 20-year O&M contract would fix costs and ensure system reliability.

 

“Where the P-3 really comes into play is not only delivering the project, making sure this is a project that people here will be very happy to ride for many years to come in the future and that the ongoing operations and maintenance will be invested as it should be and not go into disrepair.”

 

The P-3 model is a design-build-finance operate and maintain contract, that transfers risk and responsibility to a private partner.  Key incentives for the private developer would be the estimated 97 million dollars in transit oriented development revenue and 141 million of other potential income from HART-acquired properties.  But, HART Vice Chair, Terrence Lee, asked if the 57 million dollars in future parking revenue was accurate.

 

“I think we’re also studying the impacts of autonomous vehicles.  You know, everything I read about autonomous vehicles is that your parking garages become obsolete.  People aren’t going to be parking their cars, and, you know, I just want to understand that that risk has been baked into these projections or analyzed.”

 

HART executive director and CEO, Andrew Robbins
Credit Wayne Yoshioka

The consultants also say there’s no legislation required for a

P-3 contract.  But, HART is responsible for construction, not O&M.  HART Executive Director and CEO, Andrew Robbins, says he plans to brief the Honolulu City Council Transportation Committee May 24th on the proposed option.   He says, if the P-3 does not go through, HART will revert back to Design – Build.

 

“What we see on other rail projects around the country, and even around the world, is that government works very hard to get the project built.  Very often they’ll go over budget and over schedule.  It gets done, people ride it and then, ten, fifteen years down the road, there’s another call for funding, when the assets need to be replaced.  What we’re trying to do is get this project on a sustainable course.”

 

The last 4.1 mile, 8-station City Center Segment from Middle Street to Ala Moana Center is expected to cost 1.6 billion dollars and break ground next year in order for the system to be fully operational by December 2025.  Wayne Yoshioka, HPR News.