Rail on the Ropes

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Artist depiction

BY MALIA ZIMMERMAN – 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.

The project estimates jumped from $2.7 billion in 2004 to $4.6 billion in 2006 to $5.6 billion in 2011 and climbing. While the newly elected Honolulu Mayor Peter Carlisle maintains the rail is on track, and held a $30,000 ceremonial groundbreaking and press conferences to announce contracts that have been award, the promised $1.855 billion in federal funds has not materialized.


In fact, just $623 million, a fraction of the $1.6 billion in contracts already awarded by the city, has been collected from Oahu taxpayers.

As Panos Prevedourous, University of Hawaii environmental engineering professor and rail foe, points out, Hawaii has received just $34 million from Congress.

In addition, U.S. Senate Appropriations Chair, Daniel Inouye, D-HI, has pledged to secure more than $1 billion in federal rail funds, but with the city requesting $1.855 billion at a time when the new Republican House leadership is slating huge cuts for transit projects across the country and freezing projects not already underway, that funding may dissolve, Prevedouros said.

“We are fooling around with very large numbers and the only concrete money from the mainland comes up to $34 million. There are a lot of fat numbers and fat contracts, but all these years with Hannemann and Inouye pushing for money, that is all they’ve come up with. And that does not bode well for the future of this rail system, especially since that money was essentially pork. … The big priority of congress is to maintain rail we have,” Prevedouros said.

If money problems that only seem to be getting worse in this economy aren’t enough to bust this multi-billion dollar project, a new lawsuit to be filed within the next four weeks may bring the steel on steel rail to a screeching halt.

Former Democrat Governor Benjamin Cayetano, Republican Senator Sam Slom and Honolulu transportation expert and author Cliff Slater, have become the focal point for conservatives, liberals, conservationists, environmentalists, Democrats, Libertarians, Republicans, property owners, farmers and small businesses, who are concerned not only about the ballooning cost of the multibillion dollar project, but how the 20-mile steel on steel elevated rail system through downtown Honolulu will impact the environment, view planes, ancient Hawaiian burial sites, historic buildings, property rights, traffic and noise levels.

Ben Cayetano / https://farm3.static.flickr.com

The alliance, organized and funded through HonoluluTraffic.com, teamed up with nationally renowned environmental attorney Nicolas Yost, partner in San Francisco based SNRDenton firm. Yost is considered one of the top – if not the top – environmental lawyer in the country.

He is the recipient of the American Bar Association’s 2010 Award for Distinguished Achievement in Environmental Law and Policy. Chambers USA ranked him as one of the leading American lawyers for business in the field of Native American Law.

His experiences over decades includes acting as general counsel of the President’s Council on Environmental Quality and drafting the federal government’s National Environmental Policy Act (NEPA) regulations. He’s tackled airport expansions, gas pipelines, Native American Indian burials and gaming sites, power plants, highways, bridges, and rail projects. He represented a host of Native American groups.

The federal lawsuit to be filed in Hawaii challenges the Federal Transit Administration’s acceptance of the city’s rail Environmental Impact Statement. The plaintiffs maintain that all alternatives such as an expanded bus operation, a bus rapid transit system, managed lanes and a light rail, were not properly vetted before the heavy steel wheel on steel rail option was selected as the best option.

Cayetano notes that when Jeremy Harris was mayor from 1994 to 2004, he contracted Parsons Brinkerhoff to conduct an Environmental Impact assessment of his proposed Bus Rapid Transit system from Kapolei through Waikiki. Parsons determined that the estimated $1 billion project favored by Harris was the best option for the city. But shortly after, when Mufi Hannemann took the mayor’s office in 2004, and asked for an evaluation of his plan to build a steel on steel rail system along the same route, Parsons said the rail was the best option for the island.

“This is all political as far as I’m concerned. That’s the problem with this project it’s driven more by politics than by sound engineering,” Cayetano said.

Yost said the plaintiffs, organized through the non-profit HonoluluTraffic.com, will win based on the violations he’s reviewed. The lawsuit is expected to cost the challengers $200,000. HonoluluTraffic, which is soliciting donations, has raised $90,000.

“A lot riding locally is riding on the lawsuit,” Prevedouros said.

Pro-Rail Forces Take PR Blows

Council Member Nestor Garcia

The public was angered over Honolulu City Council Chair Nestor Garcia recent admission to KITV News that he receives $5,000 a month or $60,000 a year from a part time job with the Kapolei Chamber of Commerce, an organization funded largely by Honolulu rail advocates. That is more than the $58,596 he receives as a city council chair.

As the council transportation chair when the rail issue was being debated, he was taking the money without admitting to a possible conflict of interest. Critics say it was a sweetheart deal that Garcia received for pushing the $5.5 billion project through, however Garcia told KITV that he supported rail since 2003, long before he took this job in 2008.

Cayetano on Tuesday said many people who testified against the rail project at city hall said Garcia, who ran the meetings, had been unfair to them, limiting their comments to 1 minute and not allowing their many concerns about Oahu’s largest ever construction to be heard.

Consciously or unconsciously, Garcia’s decisions to move the project forward had to be impacted by his receiving $5,000 a month from rail advocates, Cayetano said.

In addition to his city council salary, and funding from the Kapolei chamber, Garcia told KITV that he receives $30,000 from Dura Construction for his work as a safety officer, for a total annual salary of nearly $150,000.

Voters Ponder Choices

A number of people who backed former city prosecutor Peter Carlisle’s bid for mayor are now questioning whether that was the right choice, including Cayetano.

Peter Carlisle

With streets pavements deteriorating and seemingly minimal paving being accomplished, the city sewer system in need of $7 billion in EPA mandated upgrades, a city water system that sees one an average of one break a day with little money to fix the problem, and other city infrastructure going unrepaired despite record high property taxes and user fees, Cayetano and others are wondering why Carlisle is pushing so vigilantly for the $5.5 billion rail project.

“I know Peter. I made the mistake of supporting him in the election in which I will not do again.  He sounds like the little boy whistling in the dark,” Cayetano said. “I’m disappointed that Mayor Carlisle has not been more careful, more judicious. Maybe it’s his experience, he spent 20 years throwing people in jail, and he never analyzed a project like this by himself.”

Cayetano noted that the city has several infrastructure problems that are already increasing property taxes, and will continue to do so.

“We cannot afford this rail project,” Cayetano.

While the 9-member Honolulu City Council majority has continuously supported rail, Council Member Ann Kobayashi, like Cayetano, is concerned about the cost of the project and its impact on the city budget. While 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, the city has been dipping into other funds, Kobayashi said.

There is the $300 million from the bus fund or $30 million over the next 10 years that the city is using for the rail instead of TheBus.

Since TheBus fund is empty, the city cannot operate the buses and handivan for elderly and disabled transport unless it raids money from somewhere else.

Kobayashi said that “somewhere else” is the city transportation fund, which is being raided by $95 million in this current budget to fund the bus system.

“They are taking money from highway fund to run the buses, when the highway fund is what they are supposed to use to repair all the potholes,” Kobayashi said, adding “and you know how bad our roads are.”

Reason Foundation and other transportation groups have ranked Honolulu as having the worst maintained roads and near most congested highways in the nation.

The city already raided $10 million from the highway fund when the Hannemann administration did the rail alternatives analysis in 2005. Kobayashi said that should be repaid, not raided again.

City, Feds Face Challenges Ahead

As to the FTA, Cayetano said government agency has a history of cost overruns averaging 40 percent.

“If they were a private company they’d be out of business but they’re in the government so I guess its okay.”

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.

While a recent state lawsuit challenging the city on its likely denigration of iwi or Hawaiian burial sites where ancient Hawaiian bones are kept, was dismissed, Yost said federal legal challenges are much different and the law is very specific on requirements for the rail project to move forward.

Besides the HonoluluTraffic.com lawsuit, and financial woes, the city faces other barriers to moving full steam ahead.

Ansaldo Honolulu, which beat out Bombadier Transportation and Sumitomo Corp. of America to win the city’s bid to provide rail cars for Honolulu’s transit system, won on the basis of its $574 million bid being the lowest of three. But since the company disclosed that $574 million only accounts for the core of the contract, and that the entire project will ultimately cost $1.4 billion, and that is without accounting for maintenance, operations or inflation.

That led Sumitomo Corp. of America to call for a meeting with the city officials and an independent audit of the bids. The company said it will likely file a formal protest because their operation and maintenance costs are lower.

In addition, the city has to get certain right of ways from the state to move the project forward.

Honolulu City Council Member Ann Kobayashi told Hawaii Reporter that the city just started meeting with the state last week, even though to certify these right of ways can take several months and even years.

Finally, the city has to submit a final funding agreement to the federal government, which it has not done yet because it is not finished, Kobayashi said.

Yet 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 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.”





  1. This was an interesting article and I generally like the work of Zimmerman and Hawaii Reporter but I thought this was an unbalanced piece. I would have liked to have seen more discussion on the special interests that oppose rail as highlighted in this video: https://www.youtube.com/watch?v=UZofhcp2BgU&feature=channel_video_title. After all, I think politicians are generally doing what they believe is the right thing and are following the will of the people who supported rail in 2008.

    • With respect for the above point of view, I’ve got a hunch that if another vote was taken on the rail issue, under today’s economic realities, the “will of the people” would likely be far different than in 2008.

  2. Excellent article. Probably the best recap of what has been going on and how flawed this project is. The questions are endless, the corruption is rampant, and what I really resented was Mufi using our own money to sell the project. Nestor Garcia’s blatant conflict of interest is actually worse than Rod Tam. Tam was usually shooting himself in the foot while Nestor is harming all of us. Tam pales in what Nestor has done. Shame on him.

  3. This rail project has cost a lot. Or I should say hell a lot. The thing they are giving contracts on their own is not quite fine. However, I must say this is quite a worthy article. You have put in it a lot of information you have done quite a research on it. Nice blog. You have done a great job.

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