Former Governor Ben Cayetano is running for the position of Honolulu Mayor primarily under an anti-rail platform. He has firmly stated that if he is elected as Mayor by the people of Oahu, he will do everything in his power to shut down the $5.27 billion rail project. This brings about the question, “What will happen to the rail project if Cayetano does win?”
According to a report released by the Honolulu Authority for Rapid Transportation, the City and County of Honolulu has already spent $503 million since the project was begun in 2006. This money was spent on planning, design, buying property and some of the construction work that has already been started. The city has also awarded $2.17 billion in contracts to various companies. Executive Director of the Honolulu Authority for Rapid Transporation, Daniel Grabauskas, stated, “I know this much. I know we would pay lawyers a boatload of cash to either try to settle or litigate the claims. I don’t know what that number is. Honestly, you could come up with a whole range.”
Legal and political experts agree that if the mayor of Honolulu does have the power to end the rail project, or at least make it extremely difficult for the Federal Government to feel comfortable awarding federal funds necessary to keep complete the project. It is generally agreed upon that if Cayetano does get elected as mayor, the rail project will probably fold.
Cayetano has asked the city why it has awarded billions of dollars in rail contracts and started construction before obtaining formal guarantees from the Federal Transit Administration that the federal government will help pay for the project. Cayetano argues that companies that have rail contracts will only be entitled to payment for work that they have actually completed, which will be a small fraction of the $2.17 billion awarded. When asked, what if the contractors decided to sue the city, Cayetano added, “If a reasonable agreement can be reached based on actual costs and work performed, why would a local contractor sue the city and then expect future work?”
Supporters of the rail project have argued that stopping rail would create thousands to tens of thousands of lost jobs for the state and would hurt the economy for years to come. Cayetano noted that only 500 jobs have been created by the rail project thus far and that he would divert funding from the rail project to fixing the sewer, water system and road system on Oahu.
Source: Honolulu Star Advertiser, 5-27-2012, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
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