Honolulu's rail project, managed by the Honolulu Authority for Rapid Transportation (HART), faces significant financial strain, impacting the local business landscape. Even with a budget that has doubled to over $10 billion from its initial $5 billion estimate, HART struggles to manage costs, particularly concerning the final leg of the project. The escalating costs pose challenges for businesses and investors reliant on transportation infrastructure.
The recent editorial in the Star Advertiser highlights the financial pressures HART faces. The City Center Guideway and Stations (CCGS) contract, the last 3 miles of the project, exceeded its budget by $360 million, coming in at $1.66 billion. This overspending necessitates difficult decisions, and could impact other projects down the line.
Adding to the complexity of the project is the legal battle with Hitachi, as detailed in reports such as the one from Hawaii Tribune-Herald. Hitachi claims mismanagement and delays have caused significant financial losses and resulted in a $324 million lawsuit against HART. The Civil Beat also notes that other contractors are also demanding more money due to years of delays. The whole system is expected to cost about twice its original estimate, according to Trains.com, which adds to the financial concerns and the project’s viability.
For businesses, the delays and cost overruns create uncertainty. Real estate developers and businesses located near the rail line have likely based their investments and strategic decisions on the original timelines. These delays also impede the broader economic benefits that the rail system promised, such as reduced congestion, increased tourism, and easier access to business districts. As Civil Beat reports, HART is trying to find ways to save money. The financial strain may lead to deferred maintenance or further project delays, ultimately hurting the economic outlook for Honolulu and surrounding areas.
