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Ernst & Young (EY) Infrastructure Advisors has advised the Honolulu Authority for Rapid Transportation (HART) that the long-delayed completion of the rail transit system in the city should be undertaken through a public-private partnership.

HART was commissioned to deliver an elevated fixed guideway rail system in the city, which is located on the Oahu island of Hawaii, in 2005. The fully automated electrically powered system will run from East Kapolei to Ala Moana Center, with stations at 21 key commuter and visitor destinations, including Aloha Stadium, Pearl Harbor, Honolulu International Airport and downtown Honolulu, Oahu's core commercial and business center. 

The total investment required for the entire system is estimated to exceed US$8 billion, a huge increase from the initial US$4 billion projected in 2006. 

The project is being delivered in three sections. The segment linking Kapolei to Aloha Stadium is being constructed by Kiewit Infrastructure West and is scheduled to begin operating in 2020. A joint venture, Shimmick/Traylor/Granite, is building the system from Aloha Stadium to Middle Street.

The P3 contract would cover the final City Center segment of the system, a 6.6km route containing eight stations. It is expected to cost US$1.6 billion to construct. The aim is to break ground next year so that the system is fully operational by December 2025. 

EY has advised that the tender should include operation and maintenance responsibilities for a minimum 20-year period, in order to attract a sufficient number of interested, financially able candidates. However, Ansaldo Honolulu already has a 10-year operations and maintenance contract for the system, as part of its contract to design and build the rail cars and communications systems, worth US$1.4 billion. It is not clear how this conflict would be resolved.

The advisors recommended that a P3 model would incentivise the successful bidder to keep to the agreed schedule for construction works through milestone payments. Their analysis concluded that a P3 could cut the capital cost of the final segment of the system by between 5 and 10%, leading to a 2% reduction on the cost of the entire system.

The decision on whether to proceed with a P3 will be made next month. The HART Executive Director and CEO will brief the Honolulu City Council Transportation Committee on the proposal later this week. 

If a P3 is approved, HART will issue a Request for Proposals (RFP) in July, with the hope of awarding the contract by the fourth quarter of 2019 in order to stay on schedule to finish the system by December 2025.