Brace yourself for a scathing assessment of Honolulu’s new “Skyline” rail project.
National rail expert Randal O’Toole, author of “Romance of the Rails: Why the Passenger Trains We Love Are Not the Transportation We Need,” spoke on July 17 with Joe Kent, executive vice president of the Grassroot Institute of Hawaii, and slammed the over-budget, behind-schedule, only half-completed megaproject that so far has cost the city about $5 billion and now is racking up the highest per-passenger operating cost of any light-rail systems in the nation. Among O’Toole’s strong remarks:
>> “I hope its future is short. I hope they don’t finish it because that’s just going to increase operating costs for everybody else. I hope that as soon as it wears out, they tear it down and start using buses — if anybody’s riding transit at all.”
>> “What could we have done with that capital cost? Well, we could have almost doubled TheBus operations each year … and that would’ve left $9 billion left over. … You could have given every student in Oahu a brand new iPad or MacBook Air or whatever, every couple of years for all the years they’re in school, and you’d still have billions of dollars left over to do all kinds of other things. But they’re not interested in saving money. They’re really interested in spending money.”
>> “In Honolulu’s case, they don’t know how they’re going to finance the rest of it. … They don’t have the money. The Federal Transit Administration hasn’t offered any money. And so they’re never going to get to the Civic Center unless … a miracle occurs and somebody comes up with several billion dollars more.”
>> “I’ve never heard of a temporary tax not becoming permanent. They always voted to continue the tax, because it sounds like it doesn’t cost anybody anything. … So people go along with it. Politicians love to have temporary taxes, because they know they’re not going to be temporary.”
>> “Rail cars last about 25 years, and most of the other infrastructure can be expected to last about 30 years or more. And so in about 30 years, you should start the conversation saying, ‘OK, it’s worn out, let’s tear it down.'”
If you would like to see the entire video, click on the image below. A complete transcript follows.
7-17-23 Randall O’Toole interviewed by Joe Kent
Joe Kent: Aloha. My name is Joe Kent, and I’m executive vice president of the Grassroot Institute of Hawaii. In this video, we’re going to listen to an interview I did with Randal O’Toole, a national expert on rail and the author of “Romance of The Rails: Why The Passenger Trains We Love Are Not The Transportation We Need.”
I asked him about the cost of the Skyline rail system, which recently opened in Honolulu.
Kent: Well, the city has finally opened the Honolulu rail, or the Skyline, from Kapolei to Aloha Stadium. How do you think it’s going so far?
O’Toole: Well, it’s going terribly. They said, “Oh, we’re worried that we’re going to be overwhelmed with riders on the first day when it was free.”
And the headlines in the paper were “Scores of people line up.” You know, less than scores would be less than 100 people line up to ride it. They did get quite a few riders the first day and the first few days when it was free. But as soon as they started charging, ridership plummeted to, as you said, around 4,000 people a day. And 4,000 just isn’t much.
The project, when it’s completed all the way to downtown, Civic Center, is supposed to carry 85,000 people a day. And they’ve already built more than half of it, and they’re getting 4,000 people a day.
Now, when they get to Civic Center, they’re going to have, you know, a destination that a lot of people are going to want to go to. But in the meantime, I don’t think they’re going to come close to even 10,000 people a day.
And you look at the fact that the fares are exactly the same as bus fares, and they collect — you know, bus fares are $3, but there’s passes, there’s senior discounts, there’s junior discounts and so on — they collect an average of less than a dollar a rider.
So even if they managed to carry 10,000 riders a day, they’d only be getting about $3 million a year.
Kent: That’s a great point.
O’Toole: And as you said, the operating costs are $85 million a year. So the $82 million difference is a huge amount of money.
Right now, they spend $210 million a year operating 106 bus lines. That’s $2 million a bus line. And all of the equipment needed for those bus lines — there’s about 573 buses that they use, and the buses cost less than half-a-million dollars each — so all of the capital costs for each bus line is only about two-and-a-half million dollars.
So two-and-a-half million dollar capital costs and $2 million a year per bus line for 106 bus lines. You compare that to the rail capital cost [of] $5 billion for what they’ve built so far — $5 billion, not $5 million — and $85 million in operating costs, enough to fund 40% of all the bus lines in Honolulu?
Kent: I see. So what you’re saying…
O’Toole: These are just ridiculous numbers.
Kent: We could actually fund half TheBus with — if we didn’t build the rail. And basically, what else could we have used for this money?
I mean, what we’re calculating at Grassroot Institute is, you know, if so few people are riding it at around $54 per passenger, you could just buy everyone a free Uber ride.
O’Toole: Well, it’s much worse than that. You take the capital cost, and you say, what could we have done with that capital cost? Well, we could have doubled the bus fleet. With the operating cost, we could have almost doubled TheBus operations each year, at least increased them by 50%. And that would’ve left $9 billion left over.
What could you do with that? Well, you could double the miles of freeway in the entire O’ahu area. And that would probably leave enough left over that you could have built, you know, 50 swimming pools for people to swim in. You could have given every student in O‘ahu a brand new iPad or MacBook, you know, MacBook Air or whatever, every couple of years for all the years they’re in school, and you’d still have billions of dollars left over to do all kinds of other things.
But they’re not interested in saving money. They’re really interested in spending money. As I see it: There’s a race among cities across the country to see who can come up with the most ridiculously expensive rail transit lines because the federal government will pay for half the cost, and so you might as well spend a lot of money because then you get more federal dollars.
Kent: Well, you know, I should mention that money could be spent on taxis just as much as Ubers, too, by the way. I don’t want to leave taxis out.
But airplanes, too, by the way. I mean, it costs less than $50 in Hawaii to jump to a neighbor island on an airplane. So the cost per passenger of this is enormous when you look at the low amount of passengers.
Is this typical for rail lines opening or even rail lines — is it typical to open rail lines halfway like this?
O’Toole: Often they open rail lines that aren’t as far done as they expect to eventually build. But usually, they have good financial plan. They have the cash in hand to build more. They just are opening it because they’ve got enough that they can actually carry some passengers.
In Honolulu’s case, they don’t know how they’re going to finance the rest of it. They don’t know how they’re going to get to the Civic Center. They don’t have the money. The Federal Transit Administration hasn’t offered any money. And so they’re never going to get to the Civic Center unless somebody — a miracle occurs and somebody comes up with several billion dollars more.
So what’s unusual is that this was an extremely poorly planned system. First of all, it should never have been considered. Buses are so much more efficient than rail. We know that there was no way that rails could be as efficient as buses.
Second, once they had done the analysis and showed that even carrying as many passengers as they thought it was going to carry, it was still less efficient, they shouldn’t have built it.
And then, we have COVID, which has reduced tourism and has reduced the number of people working downtown and has increased the number of people working at home, and so you have a lot less demand. That’s going to cut ridership on the rail line in half right there.
And of course, we didn’t know we were going to have COVID, but that’s the problem with rail. With buses, you’re flexible. You can move them around; you can change routes overnight.
With rail, it costs years of time and billions of dollars to build just one line. And then if it turns out, because transportation patterns change, you built it in the wrong place, tough luck — you’re stuck with it. You can’t move it, you can’t shut it down.
Kent: If you do your calculations wrong, then it’s a “oops,” but it’s a big “oops” the more expensive it is.
But, so the calculations that the city was using I think was north of 120,000 passengers that they would predict would ride the rail once it opened fully, and then those projections went down to 100,000 passengers per day. And now it’s, you know, hovering around 80,000. You — but do you think it could be less? And if so, why?
O’Toole: Well, it’s is never going to get to be 80,000. It probably never was going to get to be 80,000. I’m not sure there are even 80,000 commuters along that route per day.
But [because of] COVID, automatically, you can just take any numbers they projected and cut them in half. So when they say 80,000, it’s really going to be 40,000 at best.
Kent: And when you say cut it in half, is that because the trend amongst rail lines nationally is that the actual ridership is about half, or is that based on another assumption?
O’Toole: Nationally, the trend among rail lines is about 60% of what it was before COVID, OK? But that doesn’t mean 60% makes sense for Honolulu.
Because first of all, the number was too high in the first place. They were never going to get 85,000 in the first place.
And second of all, COVID, I think, hits Honolulu harder than it hits other cities. Partly because you’re so dependent on tourism, and a lot of TheBus ridership is tourists. And you’ve got less tourism now because people aren’t traveling as much.
Now, some of that’s going to bounce back. But the downtown jobs aren’t going to bounce back. People are still going to be working at home. And so I think half makes a lot more sense when you apply it to Honolulu’s rail line.
Kent: So there was an article in the Star-Advertiser yesterday about Honolulu’s operating finances are in doubt, and they’re talking about who’s going to pay for — how are we going to pay for the ongoing operational cost of this?
It’s around $85 million now, it could go up substantially from that in future years. So who [is] going to pay for this?
I know that the rail leaders are already talking about making temporary taxes that pay for rail permanent. And, but what do you think — what are your thoughts on making temporary taxes permanent, or the need to do this?
O’Toole: Well, first of all, I’ve never heard of a temporary tax not becoming permanent. They always voted to continue the tax, because it sounds like it doesn’t cost anybody anything.
People are already paying it, and so they’re not asking them to pay more, they’re just asking them to keep paying it. And so people go along with it. Politicians love to have temporary taxes, because they know they’re not going to be temporary.
Second, why weren’t they asking these questions before they built, you know, before they committed Honolulu to spending $5 [billion] to $10 billion to build the rail line? They knew in advance it was going to cost a lot of money to operate this rail line.
And they brag that they’re the first automated, you know, autonomous rail line in the country — rail transit line. Of course, if you go to airports all over the country — in Dallas, Atlanta, Denver — you know, you’ll find autonomous rail lines in those airports. So it’s not like it’s a new technology.
And in the airport where you have a lot of people trying to get from terminal A to terminal D, an autonomous rail line makes sense. But in a city where you have a thousand different destinations and a hundred thousand different origins to people’s homes, an autonomous rail line — any kind of rail line — doesn’t make any sense anymore.
The fact that it’s autonomous, obviously, isn’t saving them that much money by not having drivers. They’re still having to spend huge amounts of money, and that’s an infrastructure problem.
You run buses, they get to drive on shared infrastructure — streets that are shared with cars and trucks and bicycles, and the costs are shared among all of those groups.
Whereas if you have a infrastructure that’s dedicated just to one transit line, then the few transit riders either have to pay all the cost of the infrastructure, or somebody’s going to have to heavily, heavily subsidize it. And that’s what’s going on.
Rail infrastructure not only costs more to build — it costs far more to maintain than highways and roads because there’s a high level of precision required to make sure those trains don’t fall off the tracks. You have to keep the rails precise; you have to keep the wheels precise; you have to do all kinds of precision things; and that’s very, very expensive. So that’s why they’re going to end up spending so much money.
Kent: So going to the ultimate cost of this, how long do these rail systems last even? I mean, what conversations should we even be ready ourselves for when the rail finally gets old?
O’Toole: Well, rail cars last about 25 years, and most of the other infrastructure can be expected to last about 30 years or more. And so in about 30 years, you should start the conversation saying, “OK, it’s worn out, let’s tear it down.”
Because what they’re going to say is, “It’s worn out, so let’s spend $5 [billion] to $10 billion more to rebuild it.” The Washington, D.C., metro system, after it was about 30 years old, they said, “OK, we’re going to need $10 billion to rebuild it,” and nobody did anything.
Nobody provided them any money, and so a few years after that, they started having crashes — one crash killed nine people. They started having smoke in the tunnels that required evacuation of trains — one person was asphyxiated by the smoke. They started having all kinds of delays, cracked rails, trains derailing.
And they’ve had to spend a lot of money rehabilitating it, and they finally have it — it’s not even as good as it was when it was 30 years old. It’s still cranky in places and still slower than it used to be.
So you’re going to have to have that conversation in about 30 years. And what you should encourage them to do is, “OK, it’s fully amortized. Let’s tear it down and get some modern transportation here instead of this obsolete transportation that you built us in 2023.”
In general, you can figure you’re going to have to spend at least half as much on rehabilitation as you spent on building it in the first place. So this isn’t a case of, “Well, we spent $10 billion, but it’ll be there forever.”
No, it’ll be there 30 years, and then you’re going to have to spend at least $5 billion more — and with inflation, it’ll be $10 billion. You’ll have to spend $10 billion more replacing it. And then 30 years later, $10 billion more. Every 30 years.
Kent: You’re saying that there’s no way to just maintain it in such a way that we don’t have to rebuild it? I mean, what you’re saying is we’re going to blow it up one way or another, whether we rebuild it or just level it — it’s going to be blown up eventually.
O’Toole: Well, you think about: You buy a car and you put oil in it at the regular maintenance schedule, and you change the air filters, and you change the tires, and you do all the things that the manufacturer recommends be done every few months to every year or so.
Still, after 20 years, that car is going to be pretty worn out, and it’s going to have to be replaced pretty soon. The average car on the road in the United States today lives about 22 to 24 years before it has to be replaced. So just maintaining it doesn’t keep you from having to replace the capital.
So you can call that capital replacement. You can call it, you know, rehabilitation, whatever you want to call it. It’s going to be expensive, and it’s going to be about every 30 years.
Kent: Some rail leaders are already talking about going beyond rail, possibly tunneling to Ala Moana, [University of Hawaii] or Waikiki. What are your thoughts about these plans?
O’Toole: Stupid. That’s it. It’s just stupid. This should never have been considered. Rail is a 19th-century technology. The technology for this rail was essentially developed in 1891 by a guy named Frank Sprague.
And the autonomous part, you know, the driverless part, that’s kind of new. But Frank Sprague probably figured all that out by about 1918 when he invented positive train control — which is something that most railroads in the United States still haven’t implemented.
So we’re talking about an ancient, ancient technology. And the problem is: This technology is designed to move large numbers of people from point A to point B. But our cities aren’t like that anymore. We have point A through Z through AAAA through ZZZZ to point, you know, 1 to 10,000.
You know, hundreds of origins, hundreds of destinations that people are traveling on, and a rail line does not work. A line is one-dimensional. We need a two-dimensional transit system, and that means using technology like buses, not trains.
So anytime they’re talking about expanding this, it’s just throwing good money after bad, and they shouldn’t do it.
Kent: Now, the bus system in Honolulu is being diverted towards the rail. I think they’re trying to get more riders onto the rail. Now, the problem is, though, people are used to their bus routes going straight into town.
Is this ideal? Is this like the best way to run transportation systems? We’re hearing that some people are getting to work faster.
O’Toole: Well, some people might be lucky enough to have their job on the rail line.
But if you don’t have your job on the rail line, you might end up having to take a bus to the rail line, switch to the train, take the train to the end of the line, and then switch to another bus, and then take it to your job. And that can really increase the travel time.
There are much better ways of providing transit that involve buses that are nonstop buses, buses that infrequently stop called bus rapid transit or express buses. And those kinds of systems can move people a lot faster and can move far more people.
There’s a physical limit to the number of people who can be moved on this rail line, and it’s a lot less than can be moved on any bus line. Buses can move more people than trains, partly because buses can get out of the way. Buses can pass another bus that stopped. Buses can pass a car that stopped. Trains — if there’s one train that stopped, no other train can go by.
And so you’ve got this physical limit for trains. They can probably, probably can move about 12,000 people a day on this rail line. That’s all. And there are bus lines in the world that can move 25,000, 30,000. There’s one line in Bogota that can move more than 40,000 people a day — or, excuse me, an hour.
And so buses have greater capacity; they have lower costs; they can move faster; and they’re flexible — you can change the routes if transportation patterns change. You can’t do that with rail, at least not unless you’ve got 10 years and a few billion dollars.
Kent: Great, thanks. Is there anything else that you’d like to say about the opening of rail and its future?
O’Toole: Well, I hope its future is short. I hope they don’t finish it because that’s just going to increase operating costs for everybody else. I hope that as soon as it wears out, they tear it down and start using buses — if anybody’s riding transit at all.
It might be that by the time 30 years from now, everybody will be going around in driverless cars, and nobody will be riding transit. Transit agencies like HART and TheBus will just exist to serve their pension obligations and healthcare obligations, and not to actually move people because nobody will be riding.
Kent: Well, I guess that’s the good thing about driverless trains: fewer pensions. But thanks so much, Randal, for joining us and educating us about your thoughts about rail.
O’Toole: Happy to do it. Good to talk to you again.