LOS ANGELES — The Federal Transit Administration notified Congress on Monday that it will sign a $1.55 billion full funding grant agreement to help fund Honolulu’s $5.2 billion elevated rail project by year-end.
The signing of the grant agreement is the final step of the FTA’s New Starts federal funding process for new rail systems, and makes available $200 million to the Honolulu rail project for fiscal year 2012.
“This is an important step toward providing federal funding for the Honolulu Rail Transit project,” said U.S. Sen. Daniel K. Inouye, a Hawaii democrat and chair of the U.S. Senate Committee on Appropriations in a statement.
Construction began on the project in March, but came to a halt in August after the state’s Supreme Court ruled against the project’s archaeological survey plan designed to protect ancient burial sites.
The court ruled that the survey work had to be completed before work could resume on the project that would run 20 miles from Kapolei on Oahu’s west side to downtown Honolulu. The project is expected to be completed in 2019.
Officials from the Honolulu Authority for Rapid Transportation, the agency in charge of the project, said they have 27 trenches left to excavate in the city center and expect to complete work on the archaeological survey by early December.
The project’s largest revenue source will be the $3.6 billion gained through a half-cent general excise tax, or GET, surcharge that took effect in January 2007 and ends December 2022. So far, the agency has collected $906 million from the GET, officials said. More than $500 million has been spent on planning, engineering, design work, construction and property acquisition. Funding from the federal New Starts program administered by the FTA is expected to cover 30.3% of costs.
The HART financial plan assumes Honolulu will issue $1.7 billion of general obligation bonds backed by project revenues, beginning in fiscal 2014, that would be repaid by fiscal 2023. Other borrowing would be done on a short-term basis in the form of tax-exempt commercial paper.
Inouye said they have been debating the merits of a rail line on the island of Oahu the majority of his time in Congress. He was elected to the House of Representatives in 1959.
The system “will alleviate traffic congestion, lessen our dependence on imported fossil fuels and provide our residents, in particular those living in West Oahu, with a much needed alternative to driving,” Inouye said.
“The path to this agreement with the federal government has not been easy, but like the construction of the H-3 Freeway for Windward Oahu residents, and significant improvements to Kalanianaole Highway for East Honolulu, the rail transit project will bring welcome relief to West Oahu residents who spend too much time stuck in traffic,” Inouye said.
The FTA’s letter shows that the federal government is confident the rail project is financially sound and has a realistic construction schedule, he said.
“This landmark announcement is the culmination of the hard work and perseverance of so many people throughout the years,” said HART board
Chairwoman Carrie Okinaga. “On behalf of the HART board, we sincerely thank all of our federal, state, local and private sector partners and leaders who have helped to bring these grant monies home to Hawaii.”
