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The state has approved the city's plan on how it will address archaeological and historical finds, including ancient burials, along the route of the rail project, the interim state land director said yesterday.

William Aila, interim director of the Department of Land and Natural Resources, said he signed off on the rail project's "programmatic agreement" last week.

"The programmatic agreement provides us a process to protect historic properties and respectfully address any burials that may be found along the route of Honolulu's rail project," Aila said in an interview.

Aila's signature allows the $5.5 billion transit project to clear another permitting hurdle. The agreement also needs approval of the Federal Transit Administration, the National Park Service, the Navy and the federal Advisory Council on Historic Preservation.

Aila, who is also interim state historic preservation officer, approved the city's plan to conduct its archaeological survey in phases. The Oahu Island Burial Council last year pushed for surveying the entire route before construction would be allowed to begin.

The Burial Council last year passed a resolution asking the state not sign the agreement in its current form. The group opposes the plan because the project's final construction phase will be through Kakaako, which they said may contain ancient native Hawaiian burials.

"Doing it in phases is likely going to result in a lot of unaccounted-for costs, delays," said Moses Haia, executive director of the Native Hawaiian Legal Corp., which assisted the Burial Council. "There's no telling what's going to happen — litigation costs, delays in the construction time line because things need to be moved."

Haia said a discovery of burials that late in the project would bolster a push by the city to relocate the remains.

"The city is going to argue that the amount of money they've expended precludes them from making any design alternatives to avoid these burials," Haia said. "But the law wants to give these native Hawaiian burials the dignity they deserve."

Aila said, "There are a number of mitigation measures to ensure that rail does not erase the diverse history of this corridor, including the creation of a preservation council to educate land and building owners around the route on the importance of historic preservation."

The city is waiting for all parties to sign the programmatic agreement. The next step would be for the FTA to issue a Record of Decision, which would allow construction to begin.

The project also requires City Council approval of the city's application for a Special Management Area permit. The council's transportation committee meets Tuesday to vote on the permit.

Also yesterday, the League of Women Voters hosted a public forum to discuss a financial analysis, commissioned by then-Gov. Linda Lingle, that predicted a $1.7 billion funding shortfall for the project.

Much of the discussion centered around residents' unease over the project. One resident said the project was being "rammed down our throat." The forum ended with one of the moderators saying rail opponents should focus on trying to influence the City Council.

Not all were against the idea of some form of rail transit. Scott Wilson, a board member of the American Institute of Architects Honolulu and one of the forum's panelists, stressed his organization's preference for a light-rail system that is partially at ground level.

"The entire 20-mile system could be built within $3 billion. That's well within our pocketbook," Wilson said. "For a world-class tourism destination to build an elevated concrete railway through the length of your city, it just boggles the mind."