Trenton, NJ – Officials Say NJ-NYC Tunnel Project Likely Doomed

Trenton, NJ – New Jersey Gov. Chris Christie is standing firm on calling off the biggest public works project under way in the country — a multibillion-dollar rail tunnel under the Hudson River linking his state with New York City, officials said Tuesday.

Christie is sticking by a decision he made more than two weeks ago, when he argued the state can’t afford to pay any overruns on the $9 billion-plus project, an official familiar with the decision told The Associated Press. The official spoke on condition of anonymity because an announcement had not been made.

Construction began last year on the tunnel, which has been in the works for 20 years. It’s designed to supplement a century-old two-track tunnel and would double train capacity between New York and its populous New Jersey suburbs.

The Republican governor was given four financial options for salvaging the project, including one plan that eliminated his state’s risk for paying cost overruns, said an aide to Sen. Frank Lautenberg who also spoke on condition of anonymity. Lautenberg, a Democrat, has been a vocal proponent of the tunnel.

The Star-Ledger of Newark reported that federal officials offered to improve financing terms but offered no new money. The newspaper first reported the decision, citing three officials close to the project.

Lautenberg said that he urged the U.S. Transportation Department to give Christie options to minimize New Jersey’s financial risk and that federal officials complied.

“The federal government demonstrated its strong commitment to building this tunnel, but it was clear from the beginning that Gov. Christie planned to kill this project no matter what,” the senator said in a statement that stopped short of confirming the governor’s decision.

An official announcement is expected Wednesday.

Christie said Tuesday after a town hall meeting in Monmouth Junction that he would “make the decision when I’m ready.”

Later in the day, spokeswoman Maria Comella declined to confirm reports the project was dead, saying only: “We’re not commenting on this until we make a formal and public announcement.”

The office of New York Mayor Michael Bloomberg, who supports the tunnel but has not committed city funds to the project, didn’t immediately return a call Tuesday evening.

The first-term governor, gaining a national reputation for his budget-cutting ways, canceled the project Oct. 7 but then gave it a two-week reprieve at the request of Transportation Secretary Ray LaHood. That deadline expired Friday, and Christie said he would delay a decision until after the weekend.

Christie had already ordered a cost review in September, suspending new work on the tunnel while the estimate was completed.

The federal government and the Port Authority of New York and New Jersey are each contributing $3 billion toward the cost. New Jersey’s share is $2.7 billion, plus any overruns, but Christie has objected to the state being on the hook for those and wanted someone else to help pick up the tab.

Currently, NJ Transit commuter trains and Amtrak share the two-track tunnel, which is operating near capacity. Officials estimate the new tunnel would provide 6,000 construction jobs immediately and as many as 40,000 jobs after its completion in 2018.

Transportation Department spokeswoman Olivia Alair said Tuesday that she had no new information to share about the project.

New Jersey Assemblyman John Wisniewski, reacting to Tuesday’s reports, told the AP that discussions to save the project included forming a public-private partnership to build and lease a new terminal the project called for, a move that would have removed the costs of building it from the budget.

“This is a monumentally boneheaded move,” said Wisniewski, a Democrat who leads the Assembly Transportation Committee. “There are lots of ways to solve this problem, and the governor is not looking at any of them because he already made up his mind to cancel the project.”

Some proponents believe Christie is motivated, in part, by wanting to divert the money to state projects. The governor has said the tunnel and state transportation needs are separate issues.

He has refused to raise the gas tax, among the lowest in the nation at 10.5 cents per gallon, to beef up the nearly broke state fund.

At least $1.25 billion becomes available for state projects with the tunnel’s demise.