Feds Want $271M From NJ Transit For Tunnel

TRENTON, N.J., (AP) — NJ Transit owes the federal government at least $271 million for the Hudson River rail tunnel that Gov. Chris Christie scrapped last month, a federal official says.

The $8.7 billion project to construct a rail tunnel between New Jersey and New York was 15 years in the making when Christie pulled the plug on Oct. 27, citing potential cost overruns.

The Federal Transit Administration on Monday sent the railroad the bill for the so-called Access to the Region’s Core project.

“NJT must immediately repay all the Federal financial assistance expended for ARC under the (work agreement) which is currently estimated to be $271.091 million, plus reasonable interest and penalty charges that will be determined by FTA,” regional administrator Brigid Hynes-Cherin wrote in the letter to James Weinstein, executive director of NJ Transit.

FTA also said it would launch an audit of the project to determine how much federal funds have not yet been spent.

The Record first reported on the letter.

The federal government had committed $3 billion to the project along with another $3 billion from the Port Authority of New York and New Jersey. The state’s share was $2.7 billion plus overruns.

The Federal Transportation Administration had agreed to spend $350 million for the tunnel. In the letter, it said it was “deobligating” the remaining $79 million of that commitment.

NJ Transit officials said Tuesday the agency would release a statement later. Officials weren’t saying where the state will get the money to pay the bill. However, $1.25 billion of the $2.7 billion the state had committed to the project from toll increases could soon become available.

At least one state — New York — is already going after the $3 billion that the federal government had committed to the Hudson River rail. U.S. Sen. Kirsten Gillibrand, D-NY, has asked Transportation Secretary Ray LaHood to redirect the money to the Long Island Rail Road’s East Side Access Project and the construction of the Second Avenue subway line.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

  • rich

    what are you people thinking?? of course he did the right thing!! Look at the “Big Dig” in Boston, $22 billion over budget, not done, poor quality, years late, etc. Why should NJ subsidize NYC who benefits from NJ commuters and overtaxes them as it is. Where are our senators now getting the money for us on this?? No where to be seen, on to the next photo op!!! I don’t hace botomless wallet, do you? I know the state doesn’t either.

  • jtorres

    And if they never got started, where is all the money the government gave the state? Where did it go, exactly?

  • Sparky

    There should be a way to recall this idiot!!! He just does what he thinks will make him president in 2016 without regard to how it affects the NJ populace. No more people can get to NYC to work because the two trains that go to NYC are filled to capacity.. The highways are too clogged to take anymore cars.. and he just wants his friends in the HIghway dept to build more highways… where???? The goverment is right to ask for their money back.. who made him king anyway.. I thought this was a democracy. Fire 6,000 contruction workers..who cares! says Christie.. Cant get to NYC anymore ? Who cares says Christie Ihe has his limo.. No new jobs because of a new rail line.. who cares says Christie… let them eat cake

  • mike

    IT’S ME Right on! Unions are ALWAYS the main reason for cost over-runs and are always on the take and have Menendez and Lautenberg in their back pocket. Let’s investigate how much Lautenberg and Menendez were kicked-back from union bosses for approving such a lame deal for the State of NJ.

    Maintenance on existing tunnels a much more deserving project in these times. Hopefully when the Responsible Congress starts in Jan they will quickly force the sale of AMTRAK (scamtrack), dissolve that union and take the cash and put it toward’s Obama’s grand infrastructure scheme in a responsible way. That would be a great bi-partisan way to kick things off. Thanks to Gov Christie for fiscal responsibility and for standing up and taking punches when he has to. His leadership is what has been missing in Washington DC for a long time!

  • Progressive Teapartier

    “Mr. Malloy, 55, will be the first Democrat to claim the governor’s office since 1986. He will succeed M. Jodi Rell, a Republican who decided not to run for re-election. He will inherit a projected budget deficit of more than $3 billion, as well as deep concerns over the state’s economy and education system. ” OMG, a Republcan (other than Bush)-created defecit. All the feds are asking for is a refund for an outlay for a project that won’t happen. That’s called accountability. And its the law.

  • Bob C

    I’m sure there is going to be a lot of politics regarding this payback. With the amount of national attention Gov. Christie has received lately I’m sure the Democrats will do everthing in their power to discrdit him. They are master at that. Remember how they did thier best to make Toyota look bad? Sorry guys. It didn’t work. Toyota has had record earnings. Far more than GM>

  • ChrisMT

    @Michael- You’re point implies that the new tunnel would replace the existing ones and that’s not the case. Money needs to be spent on maintaining the existing tunnels in either case.
    @ChristieSucks- It’s not like it’s a 271Mil penalty, they just have to give the money back that was already given to them. The money is not coming out of taxpayers pocket. Also, nowhere in the article does it say that the 271 was already spent. And even if it it were, it’s called cutting your losses. 271Mil vs 9 Billion is a 97% savings. The thought that you might be a voter scares me.

  • michael

    I do like the idea of asking the unions to give back. Since when did ditchdigging become a better-paying profession than things like architecture, or even the first 10 years of lawyering. Seriously, 150-200k/yr with full-blown benefits, OT, double OT, triple OT, and retirement pension BEYOND 401k??? Maybe this project will draw the line in the sand with the overruns.

    And just FYI……You could be this project without the union labor for $2-4B. The remainder of the money goes to pay for the $60k pickup truck and the 400k house of your union operator neighboring…..you know the one who’s truck is parked in the driveway and not working like 2-3 days a week…..

  • michael

    Just wait until the first time there is a major problem with the 100 year old tunnels currenlty in use. He will go down in history as one of the most short-sighted politicians ever known and will self-implode. You thought Jersey was bankrupt? wait until you cant collect income tax because no one can get across the hudson. the fed should not pay more into the project, and ny shouldnt pay anything into it. NY dopesnt benefit from this project, and PANYNJ is contriubiting a match to the Fed. This is more than generous enough from NY, and we dont even get to ccollect the income tax…..just maybe some sales tax when you buy your lunch. the project’s estimated costs were determined by NJT, and they wanted to make it a design-build project, so NJT should be on the hook for the tab. I dont understand what people are missing about this… If you want costs that are more calculable, then you shold have made it design bid build and the contingency would go down.

  • Steve

    I love the picture they show you to try to sell this turkey– 20 people comfortably waiting for a train on a clean, empty platform . How about a picture of the truth– thousands packed on a jammed platform hundreds of feet undert the ground? Guess they don’t want you to see that reality.

  • ChristieSucks

    Good Work, Governor Crispy Creme, saving NJ money!!!!! Oh wait, now they have to pay $271 mil for NOTHING!!!!

  • Its Me

    Stan R,

    You view here is obviously very short-sighted.

    NJ is bankrupt essentially. We would be on the hook for ALL cost overruns which we know when involving union workers we are going to have.

    The question is will the overruns be a billion or 5 billion, it really is a mute issue as NJ does not have that money.

    As a corollary to this you could argue if union job requirements were abolished those cost overruns would be mitigated by arcane union workplace rules.

    For example how overtime is calculated, job requirements, personnel requirements as a just a few general comments.

    If the ARC is ‘so’ important then the Fed and NY should have increased their funding for the project.

    The Fed offered a nominal increase which really does not change the picture, and NY is not on the hook for anything.

    I am happy to see a govenor to stand up for the tax-payers of NJ who would be on the hook as an end result.

    I am also not seeing where you are getting that nice round 6,000 job number.. oh you mean those potential jobs in waiting for the union guys once they finish the Meadowlands project.

    Get all your facts straight before you post a comment that is glaringly biased.

    Perhaps NJ Transit can get the money from the huge fare increases they enacted.

    Lautenberg and Menendez should have done more, but as we all know they are ineffectual and laughing stocks in Congress…. way to represent NJ… yet everyone keeps voting them in, gotta love the Democratic machine running strong in Hudson/Bergen/Passaic Counties.

    The end result here all else being equal is potentially paying some money now (which of course any payments will be scrutinized in the courts), or pay a ton later.

    I think the choice given all of the current facts, was the best one for NJ.

  • Michele

    NJ should not be penalized for having a Governor with the guts to pull the plug on a project that could not be responsibly budgeted. Who would build a house with a carte blanche on overruns? Gov. Christie was acting in the best interest of NJ! And you’re starting to see more state governors following suit…which is just what we need for an economic turnaround – fiscal responsibility for – United STATES!

  • stan r

    gov. christie stopped a project that would bring transportation into the 21st century, cancelled 6,000 jobs and now has to pay back money that nj transit spent elsewhere. great thinking gov.

  • frank

    Did the project ever start, if so how far did they get ???

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