 Welcome everyone and welcome to Hawaii Together on the Think Tech Hawaii broadcast network. I'm your host Kaylee Akina, President of the Grassroot Institute and I'm delighted today to have a friend and an expert joining us. I'll introduce him in just a moment but you can't escape the fact that we're in turmoil in terms of the Honolulu Rail project with skyrocketing prices and a loss of revenues. One of the rail project is back in question again. There's probably no one who has been intimately connected with analyzing the rails since its inception as much as Professor Prevodorus at the University of Hawaii, Professor of Civil and Environmental Engineering. He's a legend in terms of his insights with regard to the rail. There's so much more in terms of infrastructure, transportation theory and so forth here for the state of Hawaii. We're going to ask him to give us a catch up so to speak as to what the latest is with regard to the rail. But first, I want to say hello and welcome my guests today. Ponos, welcome to the program. Aloha, always great to have you. Thank you. Aloha, Kaylee. How are things going there at the University of Hawaii with the opening of school? They're going well but of course here I'm on campus and it's very quiet. Still the UH is close to the public so we conduct over 90% of our business via Zoom like we are doing right now. All of it is, most of it is online. The library is open but we don't have so many visitations. It's a little bit strange but education is happening. Well the COVID has impacted us tremendously and the response by government to COVID and its impact on the economy has affected us as well. Not the least of which impact has been upon the rail project and I'd love to have you talk about that. But first, let's go back a bit. I mean, living this for about 14 or 15 years since its inception, what did you think way back in the beginning when we talked about this small little project that was going to cost $2.5 billion, I think now we're back, we're up to 10. But back in its inception, what were some of your concerns and what has borne fruit in terms of your prognostication since then? Right, I mean, at the time that I started working on it, I was applying my expertise in travel behavior and I've been doing surveys in Hawaii. Hawaii is an interesting place. We have a lot of ohana housing. We have a lot of people with multiple jobs. In other words, trying to make it in Hawaii. And then having the government foisting a system of one linear line with 20 stations, it doesn't geometrically, physically, or in the way we live, fit with what people do. So it didn't take a genius at the time to say, regardless of cost, this is not going to do much because 20 stations do not jive with what the people on the off were doing. Of course, it's an island, it's not even one city. A lot of population, you know, is Honolulu, North Shore, Kailua, Kanioke, all of it, Mililani. It doesn't touch major destinations. And of course, as we started talking about it, the project started shrinking. It's not even starting in Kapolei. It's one mile out of Kapolei. It's not even going to the UH. It's not going to Waikiki. So all of these things in the first couple of years, they said, what is going on? So it got me started with technical opinions. Then we had, you know, council members like Barbara Marshall, if you remember, she was always questioning things and she kept appointing me to various boards and commissions to keep looking into it. And progressively, I got into the political side of it. I always started from the technical side of it. Well, you gave us some dire warnings from the start. What's one that has come to pass? Well, clearly, the constant duration, we're way past the point. I mean, the train was the shorter version of the train. Remember, the original was 34 miles. We all settled, okay, we're going to do 20 miles. The 20 miles was supposed to be fully operational at the end of 2019. And there is no single mile that is operational in 2019. Now already we started talking 2025-2026. And then of course is the cost. Well, actually, I was quite conservative. I was thinking $6.4 to $7 billion. As you said in the introduction, we're already at 10, and we're only two thirds complete. And the most expensive parts are about to come to fruition now. So 10 is not the ceiling. 10 is the current estimate, which I think is going to go up to 13 or more. Well, catch us up now. Let's jump ahead from the beginning to the present day. We've had an announcement that the cost of the rail will go up by at least a billion dollars. Now we're at that $10 billion figure. We're looking at looming possibility that the federal government will withdraw its initial, its original commitment to help fund the rail, the next leg of it. And we're facing real financial issues here. Tell us about the current financial hurdles the rail is facing. Well, clearly it has a problem completing. I think we have enough money to complete and commission the train all the way to Middle Street. The most problem section is, and the city knows it and hearts knows it, is the last four miles because it's four miles and seven stations from Middle Street to Alamoana. We're going to try to construct a four mile bridge through one of the densest downtown cities in the United States. That is very problematic. Already the original estimate for that was $1.4 billion. Two years ago I said, roughly this is going to be a billion a mile, so four billion. Well, already now we are at $2.2 billion for that four miles. And of course we haven't started, we're just talking now, which they are talking now. I think it's going to come very close to $4 billion to complete this very challenging segment, which brings me to the next point that you alluded to. What do we do with Middle Street? Should we stop? First of all, nobody is arguing about stopping the rail as in killing. The rail is here, it's reality. It's clearly at the airport, clearly it's completely complete in Kapolei, Waipahu, etc. So up to Middle Street, including the airport, the train will complete. The superstructure will complete. The rail yard is done. It already has two, three trains, a few more under construction, so there will be rail operating. A smart mayor now should take that, all the good points of it, and put it to work. And utilize whatever resources we have to make a fully operational train, Kapolei to Middle Street, and simultaneously pause and really think of what is going on, or what can we do with the last four miles? Because it's not only the cost, it's the state of COVID, it's the state of the pandemic, it's the state of fear. Right now, and I'm quoting you national data, public transit ridership is 80%, 80%, 80% down in the United States. So where are we going, sinking new billions of taxpayer money into a project that is not likely to be appreciated because of fear? Because even when we have vaccination, etc., is it going to be effective? How many people will vaccinate? What is the fear of recontracting COVID after you have it? None of this, this is a brand new disease, so fear will be with us, and I'm not fear of not getting here, this is just facts. So it will be with us for the next couple of years, and then it's going to have lingering effects. So how many people will go back to mass transit? Why are we doing this now? Let me back you up a little bit. You raised the question or the issue of stopping the rail before it reaches Alamoana, that the most talked about point has been Middle Street, although people are talking about other points. You seem to think, if I got you correctly, that it is feasible to stop rail at Middle Street, and what do you envision would take place in terms of the overall transportation infrastructure if we stop rail at Middle Street? It has major points, and I published several of them. It's actually up to Middle Street, it's a very proportional system. It's 16 miles, all of it has gone to bed and has been constructed, so it's a done deal. 16 miles, 16 stations. Very nicely, you know, every station is one mile apart. We're going to have extremely synchronized trains. It's going to be a real fast service couple laid to Middle Street. Why Middle Street? There is significant transit magic at Middle Street. It's called the Middle Street Intermodal Center. In the late 90s, we got funded by the federal government to create a very large intermodal center for transit. So rail, naturally, stopping or ending there, it's unnatural, because we designed it like that. So it's not like, you know, you cannot stop rail at the airport. There is no transit intermodal anything at the airport. It will be simply a silly dead end. Middle Street Intermodal Center, it's a proper place for the train to stop and maneuver and process the passengers with existing bus lines, the existing hand events, the existing Uber and transit and taxi stations. And of course, we could route a few electric buses up and down Dillingham Street and make a direct connection to China Town and downtown, just like that. Waikiki a little bit more challenging, but you know, saving $4 billion and still providing a reliable connection to Waikiki. And that can be done for several million dollars, but not for billion dollars. So again, the new mayor has to weigh these things and argue, I think successfully because FTA really promotes bus rapid transit and bus things to solve transit problems in cities. It gives us the flexibility to adjust the system. We are out of the 20 miles we did 16. We did our best, but look at the money problem, the community cannot bear the cost anymore. Now, do you think the mayor could really pause the rail as the current mayor is suggesting, but wouldn't that entail exorbitant costs in terms of being able to restart it. It's not going to be unilateral. It's not dictatorial. He needs to assemble and team and go meet. First of all, he has to have at least some partial support from the city council and then the mayor partial support of the city council. Go to Washington and meet them and you know present the myriad of problems we have had and renegotiate the contract. That's, that's how it will be done. There isn't too much that we are going to lose the only contract that the current administration has led is the underground utilities on Dillig and Boulevard, which is good to be done for resiliency purpose. So if we get a hurricane, Kaliqi will have better electricity distribution because there will be no power lines to fall down. So it's a little bit of make work kind of project but it has utility all by itself. It's not completely lost money. And of course it's going to look more beautiful because Dillig and Boulevard is not going to have any obvious utilities anymore. It's going to be a clean street. So there is some benefit to that. So there are ways to adjust the budget and talk FDA into some sense because you know they're core responsible about this. We ask when they know it. What are your thoughts about the management of the rail at this stage that there's been talk about the departure possibly of Andrew Robbins, the CEO and that's lent a little bit of instability in terms of discussions on the city council and part. Yeah, I think we made the two mistakes we had to two CEOs Grubbowskas and Robbins and both of them, while they were very smart people and good communicators, they were the wrong people for the job. Grubbowskas from Boston was a train operator. We are not having any operating train. It's a construction project. Robbins from Canada, Bombardier was essentially a train salesman. He knows a lot about rail systems and how they operate. We're not operating any rail system. We're building a bridge with some stations. So both of them were really out of their element in terms of managing this project. They're transit officials and this is not a transit project. It's a construction project. The management has been very poor because at the top, you can sell these people a bill of goods and they will purchase it because they are not construction experts particularly in Hawaii, which is a very difficult place to do construction because of our very special soil conditions, materials conditions, cost conditions, labor conditions. All of these are very unusual and none of them had the expertise to really understand. So whatever people told them, well, okay, they said yes and they tried to manage the problem with wards and obviously wards don't cut it. Well, that's a very fascinating perspective. We're going to return in just a moment. We'll take a break. My guest today is Panos Previdores. We're talking about the rail getting the latest update. Don't go away. I'm Kelea Ikeena on Think Tech Hawaii Broadcast Network. We'll be right back after this. Welcome back to Hawaii Together on the Think Tech Hawaii Broadcast Network. I'm Kelea Ikeena, your host. My guest today is Panos Previdores. We're going to jump right back into it because this is such a fascinating topic. He's giving us a catch up on the current rail situation in Honolulu. Panos, thanks for standing by again. You know, there's been a lot of talk about P3, public-private partnerships, and that in a sense was the salvation, so to speak, to the funding situation for the rail. But this has seen apparently fallen through and we're facing a lot of difficulties in getting a suitable PPP up and running and finding a partner who will actually come in and be the one that will get us out of the mess. What are your thoughts about this? Well, my thoughts is that we are desperate and we are not in a situation to be able to strike a deal that would be beneficial to the taxpayer. We're begging for money. We're begging for a private partner to come in front a billion dollars or more to complete the project to Alamona. And it hasn't worked so far. We put 1.4 billion on the table. One of the partners apparently put a bid down for 2.2 billion and the others maybe higher still. Bottom line is that this is a difficult project. The construction industry understands that they cannot do it for a low amount. And unfortunately, it's not good for the taxpayer because those people are fronting the money for us to finish it in the next five years for a return, which in addition to the regular cost and profit has a special interest for all the money that they are fronting because banks are involved, etc. So this is difficult because it's the type of project that does not generate any money to pay off its expenses. CP3s or public private partnerships are very common when you do major dams for hydroelectric. You put the plant there, it generates electricity, you sell electricity, you make a profit, you pay off the proceeds. The train will never make a profit. Out of the fare box, at best, with the original estimates of ridership will cover 30% of the operational costs and none of the construction costs. So it is a guaranteed loser, which means the following. The money has to be repaid. There is only one way to repay it, taxpayer. So the extra profit of the P3 partner who's going to front the money to finish it will have to be paid by the taxpayer and the GT is not going to cut it because the GT is not even collecting the money that it promised to collect. The tourism has, you know, well, right now it started, but at about 20-25% and I don't know if we're going to maintain that level, how high it's going to go. Bottom line is that we used to collect $150 million a year and now we're not even collecting $20 to $30 million a year in GT. So it is a significant reduction in revenue. So right now we're at dire straits. We don't have the money and even if we open the rail, we're not going to have the ridership. It is a clear lose-lose. Talking about dire straits financially, let's go to the federal side. The FDA funding, what's the status of that and is it likely that the funding will still be provided to Hawaii? Well, that's the thing that we really need to sit down with these folks and say, you know, look what has happened here. Yes, we promised the 20 miles, but we have such a very hard time delivering even 16 miles. So help us out here. I mean, we're going there with the wrong perspective and trying to go through their hopes and, you know, start to a deal that is no longer feasible. And of course now we have to put them to test and say, okay, you guys gave us and approve the forecast we have for ridership. Now we're going to get only 20% of that ridership. So where are we going with this? So they need to help us finish it in a way that makes sense. And one of the ways that makes sense right now is to completely, completely rail and commission it. Commission it means it's a completely ready system like you buy a car from a manufacturer ready to start it and work. It's one thing to construct. It's another thing to commission the rail. It's going to take almost another year to make sure that everything works. The elevators, the escalators, the doors open reliably. Everything, the commission of the system is a very tedious and then the process that takes a lot of time. So they need to help us to have a fully functional system to the airport and Middle Street and that's going to take at least another couple of years and several hundred million dollars more to finish that. After that, let's see where we are. I mean, do we even get some ridership to the airport, etc. Do people actually use it? So there are a lot of questions and FDA is a partner. They are not writing blind checks. So we need to bring them to the table and negotiate a feasible deal for this project. If anything, I would go actually and say, you know, there have been so many delays so much up your gift. What are you talking about? The second half, 750 million. We need a couple more billion dollars. Can you please help us with it and also aim high. Here with the administration we've been having, every time we beg and we ask for forgiveness. Why? I mean, I have seen the studies and what they approved in the beginning. They were essentially, I don't want to use bad words, co-conspirators. It wasn't a conspiracy but they are core responsible for what happened. And they haven't been particularly helpful along the way. So the local taxpayer got severely affected and the feds didn't help other than providing some sharp criticism. But that's too easy to do. I mean, I can do it from my office. I don't need 20 people in Washington to do that. So they need to help. We're in the midst of a mayoral race, as you know. And that adds to the transitioning that's going to take place in terms of the future of the rail. As you look at each of the two candidates, Amemiya and Blanjardi, what are your thoughts in terms of what each has to offer in terms of strengths or weaknesses for resolving our rail situation? I have no faith in what Keith Amemiya is going to do. If I'm a little harsh at him, I would call him Kerkawal version 2. So status quo, same old, same old. It's not going to work. Same old, same old. It means every year, literally we add a billion dollars. We cannot continue with that. At least Rick Blanjardi is entertaining options. His answers will never stop rail and let's see. I want to get elected, have a clear talk with the heart and then have a clear look at their books and make a business decision as to where the numbers are leading us. If the numbers are untraceable or improbable to be able to pay these amounts and then finish it, we have to develop a plan B. And once you get your act together, the feds will play along with it because then you're proposing a rational alternative, whatever that alternative might be, whether it's going to be permanent or temporary. Everything is temporary. I mean, you can argue, you can succeed that you stop the rail at Middle Street and then, you know, another movie Hanuman or what have you 10 years down the road, it's going to take train from Middle Street to the UH. Nothing stops that. Nothing for now, though, we have to stop loss and clearly we don't have the money to complete it in the next five or six years. So a reasonable position will be something that what Blanjardi says. Look at it as a business proposition. Look at the books and see where the money takes us. How much money we have, the money we have, we should use it to finish it. Commissioning the system is very important. This is a very expensive system that has at least a possibility to do some productive work. Focus on having a productive system, couple A to Middle Street that operates and does something for our population. They've been paying for that since 2008. If you want to see some return, if nothing else will be cleaner, larger, faster buses, running on the guideway, have them see it, have them use it. Okay, and then after Middle Street, we can we can start thinking about, do we really want a four mile bridge through Chinatown, downtown Kakaako, and all the way to Alamoana. Do we really want that? Is there any ridership to justify that decision? So I think a pause would be something that we should consider. And I think only Rick Blanjardi is willing to consider that option. So for me, that's that's where my vote goes. What do you think the overall impact of COVID has been on the rail? You alluded to it a bit earlier. And how do we factor the COVID response into the future of rail? Yes, that's that's an excellent question because all of it, we know what happened to the past. So there's going to be one year of calamity. We know that it's a calamity of we didn't collect the money. And of course, our right transit ridership has dropped by 80%, as I mentioned, but people are all about change. The situation may change. I don't think it's going to change the day after the election or January 1st. I think it's going to change sometime in April or later after we go through the winter, the winter flu things. COVID will still be a threat. Better and more vaccines will be available by spring. So we may be able to start having a more normal summer. At that point, we'll see how things begin to develop in terms, you know, of GT collections, people reaction to using mass transit, etc. However, overall, the term that the trend is not is not positive for small cities with transit systems because we know from the past that Uber ate their lunch. So services like Uber, smart taxes, automated taxes, automated vehicles and all that's the future of 2050 and beyond. So this train was obsolete the moment that boom, we put it on the table. Now with automated vehicles and common technologies in 2030, 2040, this train will be completely obsolete by 2050. And we'll already start talking about diversity, doing something else with it, because as a train is not going to work. What a future we have before us with the rail. I wish we could talk longer today. I want to thank you so much for sharing your insights. And if anyone would love it would want to get a hold of you talk with you. How do they connect with you? The best is via Facebook, or if they have a specific question, they can, they feel free to email me at pdp at hawaii.edu or find me out through the web on my at the UH or Facebook. Thank you for being with us again today. I'm Kaylee Akina on the think tech Hawaii broadcast network. We've had our guests Panos Preveduros, and we will see you next time. Aloha.