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Friday, December 19, 2014

Rail Project Expected to Be Over Budget

The Honolulu Rail Project is now estimated to be between $550 million to $700 million more than originally planned.  Members of the Honolulu Authority for Rapid Transportation blamed the booming construction market to be the major source of the problem, and noted that construction companies came in with higher bids than what was anticipated.  At this point, 40 percent of the work has yet to be contracted out, making critics of the Rail Project extremely nervous as to what the final price tag will be.

The city has several options to raise the additional money needed to complete the rail project.  The first option is to attempt to extend the 0.5 percent general excise tax surcharge past its 2022 expiration date.  Another suggestion was to divert more than $200 million in federal funds currently used to support the city's bus system.  Finally, rail officials are suggesting splitting the work into smaller contracts, hoping that construction companies will offer more competitive bids.

Source: Honolulu Star Advertiser, 12-19-2014,
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC