by Wendell Cox 12/05/2010 in new geography

Hawaii Governor Linda Lingle has released an independent analysis of the proposed Honolulu rail program to the public and to elected officials. The report was commissioned by the state Department of Transportation. Infrastructure Management Group, CBRE Richard Ellis and Thomas A Rubin performed the equivalent of a “due diligence” report on the project, and according to the Honolulu Star-Advertiser, indicated that the project would rise in cost by $1.7 billion to $7.0 billion for the 20 mile long line.

In addition, the consultants indicated that operating subsidies could be substantially higher than forecast, and that the city of Honolulu could become saddled with heavy debt by the project. Further, the consultants noted the likelihood that ridership projections might not be met.

Post-rail transit system usage and fare revenue are likely to be substantially lower than that projected in the current Financial Plan, since the Plan’s projection would require an unprecedented and unrealistic growth in transit utilization for a city that already has one of the highest transit utilization rates in the country.

The findings of cost escalation and over-projection of ridership have been noted as a fairly routine occurrence in international infrastructure research.
Note: Honolulu rail project planning documents indicated greenhouse gas emission reductions as a benefit of the project. Demographia published an analysis indicating that the impact on greenhouse gas emissions either a marginal increase or a marginal decrease depending upon performance. It was projected that any reduction would have been at costs per ton many times above international standards.

COST Commentary: Major cost overruns and significantly lower than estimated ridership have plagued almost every rail transit system in the US over the past 25 years. In Austin’s commuter rail project, the ridership is less than one-half the estimate, construction/implementation costs were about double and operating costs are about 5 times the estimates. This adds up to a taxpayer subsidy of about $40,000 per year for each daily two way rider. Even if cost and ridership estimates were achieved, the cost effectiveness would still be unacceptable in comparison to alternative transit solutions and the high costs would still degrade overall transit service rendering it unsustainable.

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