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NJ Governor Kills Massive NY Tunnel Project

Thursday, October 28, 2010

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New Jersey Gov. Chris Christie has officially killed a plan to build a commuter train tunnel to Manhattan—the nation’s large infrastructure project—saying his strapped state should not foot the bill for a project that promises billion-dollar overruns.

“I cannot place, upon the citizens of the state of New Jersey, an open-ended letter of credit,” Christie said in his announcement Wednesday (Oct. 27).

Proposal and Reprieve

Known as Access to the Region’s Core, or ARC, the nine-mile Hudson River tunnel from North Bergen to Manhattan was supposed to have doubled train capacity along that corridor when it was completed in 2018.

The plan was proposed by then-Gov. Jon Corzine, a Democrat, in June 2009. Critics said the plan was intended to boost Corzine’s bid for re-election.

Christie, a Republican who was elected in November 2009, said Wednesday that he had “relied upon the Corzine Administration’s representations about this project” and had supported it at the time. He said he still considered the project worthwhile, but “one that we simply cannot afford.”

Christie announced Oct. 7 that he would scrap the project, but U.S. Department of Transportation Secretary Ray LaHood asked for a reprieve while a working group re-examined the project’s costs.

Predicted Overruns

Christie ended the reprieve for good on Wednesday, saying that his advisers were now projecting overruns of $2.3 billion to $5.3 billion beyond the price tag that various authorities have estimated at anywhere from $8.7 billion to more than $12 billion.

Federal DOT had pledged $3 billion to the project, and the Port Authority of New York and New Jersey had promised “up to” $3 billion.

The rest of the cost  would have fallen solely on the shoulders of Garden State residents—a financial burden that Christie said would leave New Jersey unable to pursue many other projects.

Options Rejected

In his 20+-minute statement, Christie said he had considered and dismissed several options for the plan.

Scaling down the project would reduce its value to transit users while not significantly cutting its cost, he said. And financing the project through the Federal Railroad Rehabilitation and Improvement Financing loan program “is just another way of issuing debt” that would take longer—and thus cost more—to repay.

“Regardless of the terms that would be offered, in the end the taxpayers of New Jersey would be on the hook for every nickel of the cost overruns,” the governor said.

A public-private partnership—a third option—would not change “the cost or the technical risk” of the project. “You bring a partner in—we are still, the State of New Jersey and its citizens, going to have to pay for the cost of it,” he said.

Critics had also found fault with the tunnel route, saying the station below 34th Street should be tied in more closely to Penn Station. But, again, Christie said, developing a new route would not diminish the cost of the project, which has already consumed about $600 million for planning and design.

No ‘Blank Check’

Given the future funding assurances that the state would have to provide, Christie said, “what the proponents of this plan are asking me to do, on behalf of citizens of this state, is to hand them over a blank check. I simply will not do that to the people of the State of New Jersey.”

“This is how we got ourselves into the third-highest debt load in America,” he said “This is how we got ourselves in to the awful fiscal mess that we're in, and often during the campaign, I would say that if I were elected, I would make the hard decisions that were necessary in order to return our state to fiscal health.”

His decision did not make him happy, Christie said, “but I do this with an absolute sense of resolve and commitment to the promises that I made to the people of the state and what I believe is responsible conduct of the chief executive of the state.”

He said his administration had already begun the process of shutting down the project.

“There is no opportunity for reconsideration of this decision on my part,” he added. “I am done. We are moving on.”


Tagged categories: Infrastructure

Comment from Michael Pasquarella, (10/29/2010, 7:10 AM)

Governor Christie you made the right decision on this matter, thank you for your courage and commitment on behalf of the people of New Jersey. Your right, it is time to move onto fiscal responsiblity, if each state did what you have done they would not have the deficits they currently have. It is time to move on...

Comment from Eric Swanson, (10/29/2010, 8:42 AM)

Wow... what if we had a President that said NO once in awhile? Good for you. If you don't have the money to pay for something... maybe you are spending beyond your means!

Comment from michael kronz, (10/29/2010, 11:30 AM)

Just a thought,.would this announcement have waited until Wednesday? While I'm all for fiscal responsibility, this project is sorely needed in the region. Not to mention the thousands of jobs that would be created. We spend 3 billion a week in Iraq and Afghanistan on top of the 3 trillion spent. What's wrong with this picture?

Comment from Joe Haydu, (10/31/2010, 7:37 PM)

How much of a bargain was it to nix the Hudson Tunnel? Over $600 million already spent, $47 million in land acquisitions, months of additional construction, at taxpayer’s expense, to undo the work already completed to restore the land back to its original state, not to mention the $3 billion that New Jersey is losing in Federal funds. Add in the tens of thousands of lost jobs that would have been created from this project, not to mention the hundreds of jobs lost by construction and design teams already employed on this project. Sooner or later this type of project will need to be done/ How much will it cost then?

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