Battle Escalates Over the Future of Honolulu's Proposed Multi Billion Dollar Rail
BY MALIA ZIMMERMAN - Proponents and opponents of Honolulu's planned $5.3 billion elevated steel-on-steel rail project are nearing the final of a battle over whether the project will actually be built.
On one side, the appointed board charged with overseeing the project, Honolulu Authority for Rapid Transportation, rushed to sign a $1.4 billion 14-year contract on Monday with the financially troubled Italian-owned firm, Ansaldo Honolulu Joint Venture, for car construction, operation and maintenance.
U.S. Senator Daniel Inouye, the most important backer of the project, also is stepping up the pressure, announcing today that Hawaii could be eligible for up to a portion of $510 million in FY 2012 should a full funding grant agreement be signed by the end of 2012. So far, Hawaii has received about $90 million, but Inouye pledged to bring in $1.855 billion should the city keep the project on track.
On the other side, there are several well-known community and political leaders who oppose the elevated steel rail system because they say it is expensive, invasive, culturally insensitive, inflexible, and frankly too ugly, for an island paradise.
The public appears to be passionately split on the project, with support largely coming from the neighborhoods that believe the rail will alleviate their traffic.
While Sen. Inouye said today "We must set aside our differences and work together," opponents of the project, which include former Gov. Benjamin Cayetano, retired Judge Walter Heen,University of Hawaii Law Professor Randal Roth, retired businessman Cliff Slater, Dr. Michael Uechi, Sen. Sam Slom's Small Business Hawaii Education Foundation and Hawaii's Thousand Friends, have no plans for doing so.
The unlikely allies - to include former political opponents from different political parties - filed a lawsuit in federal court last Spring to force the city to revamp the Environmental Impact Statement. They believe that the EIS does not fairly consider all other transportation options, including those that are less expensive and more environmentally and culturally friendly.
The Outdoor Circle, which is opposed to the project, issued a scathing statement this week, saying in its 100 year history, The Outdoor Circle has seen no other venture that holds the potential to degrade the landscape of Oahu as the proposed Honolulu Rail Transit project.
"Of great concern to The Outdoor Circle is the visual damage caused by Transit. The City acknowledges that the damage will occur but has determined that the blight the project creates is the price our residents and visitors must pay for “progress.” Imagine the cumulative visual impact of more than 20 miles of a massive elevated concrete guideway, supported by 720 large concrete columns with the inevitable graffiti and enormous transit stations. The project is destined to become an ugly scar across one of the most beautiful places on earth while there is little evidence that it will bring relief to Oahu’s unacceptable traffic situation," the Outdoor Circle said.
The League of Women Voters also is opposed to the project.
The opposition, which organized and funded its lawsuit through HonoluluTraffic.com, teamed up with nationally renowned environmental attorney Nicolas Yost, partner in the San Francisco-based SNR Denton firm.
While the case is still in Hawaii's U.S. District Court, Judge A. Wallace Tashima, a Senior Ninth Circuit Judge of California, has been assigned to the case because all local judges recused themselves. Yost noted that the FTA decisions have had a poor record of withstanding legal cases before the 9th circuit court of appeals, which Yost said is widely considered the most environmentally friendly court in the nation.
Their first court appearance will be Wednesday at 10 a.m. in U.S. District Court when attorneys for the city and federal government try to have the plaintiffs disqualified.
PR Ramped Up
The opposition alliance speculates rail proponents' are ramping up publicity around the project, to include press releases on the newly signed Ansaldo contract and Inouye's announcement, to convince taxpayers and Judge Tashima that the rail project is a done deal.
It's not a done deal, argues transportation expert Cliff Slater, who founded HonoluluTraffic.com.
Panos Prevedouros, professor of civil engineering at the University of Hawaii, agrees with Slater, and said today's announcement by Sens. Daniel Inouye and Daniel Akaka says absolutely nothing.
"Honolulu does not have a full funding grant agreement and the sources that the Senator quotes are not FTA New Start funds. Congress has yet top approve the next transportation authorization act.
"Like in the past 7 years, this will be just a trickle of a few million dollars for Honolulu that did not even cover the fee for the prime consultant, PB. So far Honolulu has received less than 100M in federal funds and any federal funds it receives, including all forms of pork will be subtracted from the possible maximum allocation of $1.5 Billion in New Start funds," Prevedouros said.
Inouye said in his statement “Federal funds are hard to come by in the current budget climate and Honolulu has an opportunity to secure substantial federal support for this long awaited project designed to help alleviate traffic on Oahu."
However, Prevedouros argues: "The good Senator tries to sugar coat this news, but the fact remains that he has not provided nor will he be able to provide anything over 25 percent of the total cost to build the project, so in fact he's committing Hawaii to a permanent tax hole and to a perpetual stagnant economy due to this massive under-performing infrastructure project."
Politics Over Sound Engineering
Former Gov. Benjamin Cayetano, a Democrat who served in public office for more than three decades, said the rail project is driven by politics, not sound engineering.
Powerful forces were aligned in Hawaii leading up to the 2008 general election when then Honolulu Mayor Mufi Hannemann used between $2.5 million and $4 million from the city taxpayers, $3 million from his campaign and the influence and money from pro-rail businesses, unions and elected officials to win the public vote on rail. He had on his side powerful politicians at all levels including Hawaii's congressional delegation and then Gov. Linda Lingle.
Honolulu City Council Chair Nestor Garcia also did his part to push the project through when he was the council transportation chair, but later it was revealed that he received $60,000 a year - more than the $58,596 he received as a city council member - from an organization funded largely by Honolulu rail advocates. Critics say it was a sweetheart deal that Garcia received for pushing the project through, and Cayetano said many people who testified against the rail project at city hall felt Garcia had been unfair to them, but Garcia denies those charges.
While the majority of the 9-member Honolulu City Council has continuously supported rail, Council Budget Chair Ann Kobayashi, like Cayetano, thinks there are better options and she is concerned about the cost, especially after estimates jumped from $2.7 billion in 2004 to $4.6 billion in 2006 to $5.6 billion in 2011.
The rail is supposed to be funded from a half of percent General Excise Tax that the state collects on the sale of all goods and services, but because the money has not come through, the city has been dipping into other funds, Kobayashi said.
While the Honolulu Mayor Peter Carlisle maintains the rail is on track, and even announced the project might be less than originally thought, critics note the promised federal $1.855 billion is still just a promise.
As to the FTA, Cayetano said government agency has a history of cost overruns averaging 40 percent.
“We cannot afford this rail project,” Cayetano said, pointing to the city's other infrastructure needs.
Contract Awards Bother Budget Chair
Even though federal funding has not been fully secured, and may not even materialize, the city is already giving out contracts – something that bothers the former council budget chair.
“The project not yet approved, we don’t have federal money yet, and the city is already giving out more than $1 billion in contracts. It is nuts,” Kobayashi said. “I am worried about the money. What if we don’t get it? We’ll all be paying for it.”
Kobayashi, Slater and Prevedouros are among several people who are alarmed with the selection of Ansaldo over its competitive bidders, because Ansaldo's parent company lost more than $1 billion in the third quarter, leading to its stock price falling 65 percent in the last year.
Slater called it the worst choice of all three bidders.
Prevedouros said the city picked the "most unreliable bidder with the biggest skeletons and most baggage."
"There is no reason for selecting an inferior rail manufacturer that belongs to a troubled company (that wants to sell off its rail business), located in Italy, a country with possibly insurmountable debt problems. With so many qualified and reliable rail manufacturers, why are city officials sticking with Ansaldo, the most troubled one, and one of the most complaint-prone? Why would Hawaii source a train in Italy instead of Japan, China or Korea?" Prevedouros asked.
Ansaldo company officials convinced HART board members to sign the deal when they presented more information on the company's finances in a closed door meeting and told the city that has contracts for $10 billion worth of transit projects around the world.
Kobayashi said she isn't surprised because the board seemed determined to award the bid to Ansaldo, but she questions whether the company will still be around to fulfill the entire contract.
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