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Independent review shows Honolulu's financial plan for new rail system is 'reasonable'


An independent financial review confirmed the Honolulu Authority for Rapid Transportation's (HART) financial plan for a new 20-mile elevated rail system will be able to "withstand and address risks," HART officials announced.

The one-half-percent general excise and use tax (GET) surcharge revenue forecast that will pay for the local funding share of the project is reasonable, according to the report prepared for the Federal Transit Administration by Porter & Associates Inc. So far, the Honolulu Rail Transit project has received more than $900 million in GET revenue and $120 million in federal funds, HART officials said in a prepared statement.

The review also performed two stress tests assuming worst-case scenarios: a 10 percent increase in project costs and a lower rate of GET revenue growth. The tests found that even under those conditions, Honolulu still would have the financial capacity to build and operate the rail system, HART officials said.

"This external review is a key element of the Federal Transit Administration's evaluation of Oahu's rail project for our Full Funding Grant Agreement and reinforces the fact that we are on track to receive our FFGA by the end of the year," said Dan Grabauskas, HART's executive director and chief executive officer. "This review validates our current financial plan, which includes a total of $1.55 billion in federal funding, $645 million in contingency funds to cover unforeseen expenses and an ending cash surplus of $193 million."

The 20-mile light-rail system will cover one of the island's most heavily traveled corridors and include 21 stations.

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More News from 10/9/2012