Delays, Lack of Transparency Among Reasons For City Withdrawal From Critical Rail Partnership

Oct 6, 2020

It's been two weeks since the Caldwell administration announced it was withdrawing from a crucial part of the rail project. Mayor Kirk Caldwell explained his decision at a special Honolulu City Council meeting on Monday.

Officials had described the P-3 private-public partnership as a way to ease the financial burden on city taxpayers for the last, and most difficult, part of the rail project -- the stretch into the urban core from Middle Street to Ala Moana.

But Caldwell withdrew from the process of picking the private partner contractor. Without the city's approval, the $9.2 billion project will likely stall.

At a special joint meeting of the Honolulu council's transportation and budget committees, Caldwell told members that continued delays and a lack of transparency are among the reasons for the city's withdrawal. He says the award of the P-3 contract was scheduled to happen earlier this year.

"Delay, delay, always delay. So I say forget the delays. Let's get to work," he told the council.

"Let's get together on this . . . Let's be more open and transparent. Tell everyone what's in a bid, be open and transparent. Say what are the challenges we face. And we have challenges."

Under state law, details of the P-3 contract bids are confidential until the private partner is chosen. Caldwell says his intent to withdraw from the P-3 procurement process was to shed some light on the delays in awarding the contract.

Caldwell also called for finding possible alternatives to the P-3 procurement process. He says it may be time to revisit a "Plan B" of public construction and financing for the rail project's last stretch.

But Honolulu Authority for Rapid Transportation CEO and Executive Director Andrew Robbins says the agency is moving forward with help from the state. He defended the P-3 contract as the best option for building the project.

"I want to make sure that we have exhausted every opportunity -- to find a way, see if there's a way, to get the P-3 to a successful conclusion," Robbins told councilmembers. "I don't believe it's been allowed to play out."

Robbins expressed disappointment with the city's withdrawal from the procurement process, saying he's been as transparent as he could be with the city. But he told council members that the reason why a "Plan B" is the second option is because it's not as good as "Plan A."

Time is running out for HART and the city.

The Federal Transit Administration that partly funds the rail project gave the city until the end of the year to devise a plan for the urban or city center portion of the rail project. If a plan is not finalized, the city may not receive the needed federal funds, and could even risk having to pay back money it has already spent.

Transportation committee chair Brandon Elefante says there isn't much the council can do, but a plan needs to be drafted, whether based on a private-public partnership or not.

"We cannot come to a point where we jeopardize federal funding for this project," he told HPR. "We do have to meet deadlines, we do have to make sure that we get responses from HART...There has to be a plan [going] forward, and there has to be action."

Elefante says the FTA isn't requiring the city or HART to complete the project using a private-public partnership. He says, based on responses from rail and city officials on Monday, the decisions on how the project is completed is a local responsibility, not a federal one.

HART's Board of Directors is holding a meeting Thursday, October 8, to discuss its next steps for the project.