This Isn’t Difficult To Understand: Delaying Rail’s Construction Would Cost More than Building Now, Then Tearing Down Later in Unlikely Lawsuit Loss

Count the green shirts: Every wearer is an employed rail worker.

Construction work on Honolulu rail began yesterday, and you can almost hear the howls of protest above the sounds of the boring work on the first support column’s shaft (above photo). Opponents clamor that it’s foolhardy to start work if there’s even a slight chance a federal lawsuit will succeed in killing the project.

City officials said last month that delaying construction for the lawsuit’s conclusion or even until the FTA issues a Full Funding Grant Agreement would cost more than building the structures now and tearing them down later.

“Prove it!” was the response of some, including more than a few who feigned incredulity – as if nothing could be more preposterous than to start building now and destroy what was built later.

The proof arrived yesterday in a letter (posted at Civil Beat) from the Honolulu Authority for Rapid Transportation (HART) to the City Council’s chair. Assuming a January 31, 2013 termination date, HART said building the structures over the next nine months would cost $114 million. Tearing them down would add another $5 million, so the total build-now/tear-down-later cost would be $119 million. The letter continues:

“By contrast, assuming that construction is delayed until January 31, 2013 and project construction then proceeds, the additional cost to the project that would be incurred as a result of delaying the planned construction work is about $313 million. The latter figure is based upon an analysis of estimated costs of delay claims of approximately $22 million, plus $114 million for the delayed construction, as well as $109 million for an escalation of construction cost, and an additional 11 months to complete the project with staff costs of approximately $68 million.”

Waiting to build would cost the project $194 million more than starting now, then tearing down later in the unlikely event of a complete project kill.

The reaction of some rail skeptics to this simple economics lesson reminded us of how the media reacted over 40 years ago to news about the Battle for Ben Tre during the Tet Offensive in South Vietnam.

“We had to destroy Ben Tre in order to save it,” an American officer blurted during a briefing about the battle to retake the provincial town in the Mekong Delta. The sentence stuck as a short-hand description of the futility that was the Vietnam War.

HART isn't caught in the fog of war. It has every reason to believe it will survive the lawsuit, obtain the Full Funding Grant Agreement and build the 20-mile line on time and on budget. HART’s defense of its decision to begin construction now is strong and sturdy enough to withstand the howls of protest that inevitably will continue.