The Federal Transit Administration this morning said it plans to sign an agreement before October 2011 that will provide $1.55 billion in federal funds to pay for Honolulu’s elevated commuter rail project.

The first installment of $55 million was included in the FTA’s proposed fiscal 2011 budget announced this week. FTA Administrator Peter Rogoff acknowledged concerns remain with the viability of the financial plan for Honolulu’s $5.35 billion project. However, he said those concerns aren’t expected to prevent the grant agreement from being signed by a Sept. 30, 2011 deadline.
The FTA announcement gives new momentum to Honolulu’s commuter rail plans, just days after Gov. Linda Lingle had questioned the project’s financial plan and said she would seek an independent review of it.
“It’s a great day for the city of Honolulu,” said Mayor Mufi Hannemann during a news conference at Honolulu Hale this morning. “Certainly it couldn’t have come at a better time especially when the chief executive of the state is expressing strong concerns and reservations about going forward.”
The city had been expecting the FTA to provide $1.55 billion starting in the spring or summer of next year.
Hannemann said he hopes the FTA announcement will spur Lingle to expeditiously approve the project’s environmental impact statement, once it’s released by the federal government. The city wants Lingle's approval to come relatively fast. However, Lingle has said she'll conduct a thorough analysis to ensure that the project's financial plan is feasible and that alternatives were adequately considered.
“We would really hope that she would start sending some positive messages and signals,” Hannemann said. “Whatever it is that’s holding her back, cast it aside for the good of the people.
“This is a train that will bring economic benefits for people for years and decades and generations to come.”
Ground breaking on the elevated commuter rail was supposed to take place in December, but has been indefinitely delayed by an ongoing federal review of the project's final environmental impact statement. The delay could be extended by Lingle’s plan to conduct an independent analysis of city tax revenue forecasts that are the basis of the project's financial plan. Her concern is that the project could hurt the state’s finances if it fails.
Lingle based much of her concern on a recently disclosed memo from the Federal Transit Administration to the city that raised questions about the city's ability to pay for the train. The Oct. 7 memo also warned the city that its financial plan may not be sufficient to allow the project to proceed into the final engineering phase this year.
The FTA’s Rogoff today said that warning is often given to cities seeking federal transit funds. Basically, it means that federal scrutiny rises as a project proceeds through the federal funding process, he said.
“We would not have included funding in the president’s budget for this project if we thought it was falling off the rails,” Rogoff said in a conference call with news media this morning. “We expect to continue to work with the city and county to continue to strengthen their financial plan and we will be evaluating a new financial plan when they make an application to go into final design.”
Rogoff said he was perplexed by Lingle’s concerns that city officials did not adequately study street-level alternatives to an elevated train. Numerous state agencies failed to raise that concern when provided an opportunity to express concerns about the project’s environmental impacts, he said.
Lingle has suggested the city consider building the rail partially at street-level to cut cost, given tax collections for the rail have been less than anticipated.
“The governor has an important role to play in the approval of this project, especially as it relates to state environmental law and I do not begrudge the governor having an independent look at the financing of this project,” Rogoff said. “But please know that the FTA also takes an independent look at the finances of this project and we will do so again when they submit a financial plan to get into final design.”
Lingle spokesman Russell Pang did not return a phone call seeking comment.
Cliff Slater, who advocates building a managed elevated highway rather than rail, said the FTA’s independent analysis has consistently failed to prevent major cost overruns on rail projects.
The FTA’s independent review of finances “is nonsense because they do that with all projects and the average is 40 percent cost overruns,” Slater said “(Lingle) has a concern that (Rogoff) doesn’t have and that is the impact on the state’s finances.”
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.