HONOLULU (AP) — Officials overseeing Honolulu’s multibillion dollar rail project say that depending on financing costs, the rail system could cost as much as $9.5 billion.
The higher price tag is just an example of how much the rail could cost depending on how the city ultimately decides to pay back bonds and interests on the project, Honolulu Authority for Rapid Transportation officials told The Honolulu Star-Advertiser on Thursday (http://bit.ly/2h5DSFw).
The latest figure was included in a draft update of the rail system’s financial plan.
“One financing strategy could result in finance charges of up to $1.3 billion, which would bring the total project budget to $9.5 billion,” the new draft financial plan states.
The high figure is based on a scenario in which the general excise tax surcharge for the rail gets extended another 10 years at the same 0.5 percent rate.
HART Acting Director Brennon Morioka said the $9.5 billion figure was developed over the past few months as the agency put together the draft plan and that it had not been released to the public before.
In September, HART officials estimated the system would cost $8.6 billion, with that figure including about $400 million in financing and debt service costs.
Estimates for the rail’s construction remain at $8.2 million, Morioka said. It’s the financing plan that could drive up the final budget, he said.
An initial budget of $5.26 billion included the financing costs.
Even if state lawmakers approve a permanent rail tax extension, HART and the city could look at various financing strategies enabling them to expand rail into the University of Hawaii, Manoa and downtown Kapolei that could easily drive the final cost of the first 20 miles above $8.6 million, Morioka said.