The Federal Transit Administration had hired an outside consulting firm, Jacobs Engineering Group Inc, to help monitor the $5.26 billion Honolulu Rail Project. In a recently released report, Jacobs Engineering expressed a significant concern regarding the “rapid use of cost contingency funds” and that the project contingency cash reserves dropped “below accepted control levels”. On August 24, 2012 the Hawaii Supreme Court ruled that all construction for the rail project had to be halted until an archeological survey be done for the entire project. This delay, estimated to take another 6 to 7 months, will cost the city between $64 to $95 million.
The city had budgeted $644 million as part of their contingency fund for the project and officials stated that they expect that the majority of it would be spent before the Honolulu Rail Project is completed. However, Jacobs is now recommending that the city should maintain a larger contingency cash cushion then $658 million. Jacobs is also recommending that the city create a list of “secondary mitigation” items at can be used to reduce costs in case the rail project runs short of cash. Example of secondary mitigation items include but are not limited to reducing the number of station entrances, eliminating escalators or reducing the size of the canopies that are planned to cover the stations and tracks.
The city had budgeted $644 million as part of their contingency fund for the project and officials stated that they expect that the majority of it would be spent before the Honolulu Rail Project is completed. However, Jacobs is now recommending that the city should maintain a larger contingency cash cushion then $658 million. Jacobs is also recommending that the city create a list of “secondary mitigation” items at can be used to reduce costs in case the rail project runs short of cash. Example of secondary mitigation items include but are not limited to reducing the number of station entrances, eliminating escalators or reducing the size of the canopies that are planned to cover the stations and tracks.
Source: Honolulu Star Advertiser, 10-21-2012, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
