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$14 Billion to Fix Hawaii

But Even That Won’t Cover Everything

(page 1 of 2)

   Photo: David Croxford

The tab has finally come due.

For decades, Hawaii neglected its critical public infrastructure. Inadequate roads and highways have left us with mind-numbing traffic jams, not just in Honolulu, but in Kona, Kihei and Lihue. Our harbors – the entry point for food, fuel and other necessities – lack enough piers and yard space. Thirty-eight percent of the state’s bridges are structurally deficient or functionally obsolete. More than 120 million gallons a day of raw sewage passes through sewers that are bursting at the seams. And our children attend schools and colleges with crumbling buildings and leaky roofs. The roster of major repairs and capital-improvement projects is almost endless.

But at least now we have some idea what it’s all going to cost. A report released this month by the Hawaii Institute for Public Affairs says the state and counties will spend at least $14.3 billion on critical infrastructure over the next six years. This includes more than $2.6 billion for water and the environment, the bulk of it to repair Oahu’s aging sewer system. Another $7.8 billion will have to be spent on transportation, including harbors, airports, highways and transit. More than $3 billion of that is destined for the rail project alone. Another $3.7 billion will go to public facilities, especially major renovations at public schools and new construction at the University of Hawaii.

If these figures seem too abstract, consider a single infrastructure investment: the Waimalu Sewer Rehabilitation and Reconstruction Project. Waimalu has always been a graveyard for sewers: The original system, installed in the 1950s, lasted barely 30 years. The replacement system broke down in even less time. The marshy ground next to Pearl Harbor can’t support heavy, concrete sewer pipes, so long runs tend to sag and crack. Old-timers in the neighborhood say that sediment gathers in these low spots, and the city has to send sucker trucks once a week or so to clear them. And when it rains hard, the sewers back up and flood the streets.

In 2008, the city signed a contract with the Frank Coluccio Construction Co. to replace the neighborhood’s system with new sewers that can survive in the mushy ground. The price tag of the two-year project: $45 million.

Multiply the cost and effort of the Waimalu project by the hundreds of other infrastructure projects around the state, and you get a sense of what $14.3 billion will get us.

   Honolulu County is paying $45 million to replace the sewers
   in Waimalu (that includes $7 million in federal stimulus
   funds). Honolulu’s overall spending on sewers this year totals
   $345 million.
   Photo: David Croxford

Even these figures may grossly underestimate the cost of the infrastructure problems facing the state, says Russ Saito, state comptroller and director of the Department of Accounting and General Services. That’s because the numbers that agencies provided for the HIPA report are likely skewed toward projects that have already received funding.

“It depends on how the questions were asked of the departments and what assumptions the departments used in providing information,” Saito says. “For example, I assigned my public works administrator to provide that information. But he wasn’t comfortable giving them numbers that were not already appropriated. So he limited his dollars to the amounts that have been appropriated.” In short, infrastructure needs that haven’t yet been appropriated may not show up in the HIPA report. A true assessment of the state’s infrastructure may identify billions of dollars in additional needs.

Hawaii’s infrastructure problems are hardly unique. In its 2009 Infrastructure Report Card, the American Society of Civil Engineers gave the nation a “D.” The society said the nation faces a collective $2.2 trillion shortfall in infrastructure spending just over the next five years. Broadly speaking, the gap reflects similar needs in Hawaii.

Local Spending

That’s not to say nothing’s being done here. The last few years have seen a nearly unprecedented investment in infrastructure by both the state and counties. Saito cites the Department of Education as an example. “When they started looking at it back in 2001,” he says, “they said they had a backlog of about $700 million. Now, they’ve got it down to about half that – $350 million or so.” These deficits, he points out, are the price tag for neglecting to properly maintain the schools to begin with. “If you had been spending what you should have been spending on repairs and maintenance on an ongoing basis, you wouldn’t create this backlog.”

   The average daily, two-way commute between Kapolei
   and urban Honolulu takes 140 minutes, the state Department
   of Transportation says. The annual personal cost for each
   commuter is an average of $61 a minute, according to a
   state estimate.
   Photo Courtesy of Department of Transportation

The Lingle Administration hasn’t restricted its infrastructure spending to schools. According to DAGS, more than $3 billion is currently appropriated to state agencies for capital improvements, $1.9 billion of which is for contracts that have either already started, have been awarded, or are currently open for bid. The lion’s share – more than $2 billion – goes to the Department of Transportation, which makes its infrastructure spending a fascinating study.

The state has initiated, for example, an ambitious $842 million Harbors Modernization Plan, which will address the shortage of space and adequate yard facilities in all major Hawaii ports. The dozens of critical improvements include:

• A new deep-water pier and a 70-acre container yard at Honolulu Harbor’s Kapalama Military Reservation;

• A new pier and a third harbor plus some dredging in Hilo;

• New piers and liquid bulk storage at Kauai’s Kawaihae Harbor.

Funding comes from increases in harbor user fees and revenue bonds, and the impetus comes largely from the Harbor Users Group, a collection of shipping companies, emergency response groups, the petroleum industry and other groups most affected by the decaying harbors. But, like the 12-year, $2.3 billion Airport Modernization Plan (see story, page 55), much of the funding must still be appropriated and released in future years. So these projects are far from guaranteed.

The fate of the Lingle Administration’s most important infrastructure initiative, the six-year, $4 billion Highways Modernization Plan, is in an even more precarious limbo. This ambitious plan, which includes funding for 183 separate projects across the state, was passed by the Senate; but, lacking support in the House, was deferred by the conference committee. The bill will likely be advanced again in the next session, but in the interim, the Department of Transportation will have to make do with its regular appropriation (plus a one-time shot of nearly $500 million in stimulus money).

Brennon Morioka, director of the Department of Transportation, is quick to acknowledge the challenges facing the Highways Administration. “I think we’re sorely backlogged,” he says. “Not just in the amount of new infrastructure to be provided, but also in the level of maintenance of what we currently have. So, we’re fighting two battles. One is to use what funds we have to meet the continually growing demands of the public and industry. But there’s also the battle of making sure we’re properly maintaining them so we don’t just build them and then let them fall apart.”

The dollar figures provide some details. “We’re probably about $150 million to $180 million behind in maintenance backlog,” he says. To put that in context, he points out, the state typically spends $60 million to $70 million a year on maintenance. Making up this maintenance deficit will obviously take many years. “And based on the HMP estimate,” he says, “once we catch up, we still have to spend $80 million or $85 million a year on maintenance.” In other words, the highways maintenance budget will have to increase about $10 million a year just to keep up with normal wear and tear.

“And that’s just maintenance,” Morioka says. New construction and major repairs are an even more daunting problem. “Looking out 20 years,” he says, “there’s about a $7 billion infrastructure gap.”

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