Honolulu's application to start the preliminary engineering phase of its proposed $5.5 billion rail transit system has received approval from the Federal Transit Administration. The city will now create a precise construction schedule, update its financial plan and develop a project management plan. "This is a critical federal milestone...," said Sen. Daniel Inouye, D-Hawaii. "The competition for Preliminary Engineering among our nation's cities is fierce." Officials hope to start construction on the project in December.