Honolulu’s plan to build and finance a 20-mile-long rail transit line is between $678 million and $1.7 billion short of what will be needed to finance construction.

The report was prepared by consultants Infrastructure Management Group Inc., who where hired by former Gov. Linda Lingle, a skeptic of the rail project.

The report’s release was one of the last acts of the Republican Lingle administration. Her successor, Neil Abercrombie, a Democrat, was sworn in Monday.

The keystone of the rail project financing plan is a 0.5% general excise tax collected on Oahu.

Revenue from that tax is unlikely to achieve the city’s projections, the report concluded, falling $366 million to $560 million short of the $3.5 billion estimate.

“The Honolulu rail project has many of the key risk factors that often lead to escalating construction costs and ongoing revenue shortfalls,” the report says. “Honolulu’s status as a first-time developer of heavy-rail transit, its island location, and the elevated nature of the proposed project are attributes that have been associated with cost increases for other transit properties.”

The IMG report also used a more conservative debt-service coverage model than that used in the city’s financial plan for the project, and estimated that construction capital costs would be about $200 million higher than Honolulu’s projections, or $5.3 billion.

Unlike the city’s plan, the IMG report assumes that Honolulu will have to issue grant anticipation debt — and pay debt service on it — as an advance on promised federal funding.

The most logical way to make up for any shortfall, according to IMG, is to extend the sunset date of the excise tax, increase the tax rate, or some combination of the two.

The report is now in the hands of current city and state leaders.

A new mayor took over this year in Honolulu, Peter Carlisle, who has said he supports the rail project, as has Abercrombie, the new governor.

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