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New Jersey Granted Extension On Tunnel Tab

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Rail tunnel under the Hudson River. (AP Photo/Mel Evans, File)

Rail tunnel under the Hudson River. (AP Photo/Mel Evans, File)

TRENTON, N.J. (AP) — The U.S. Transportation Department has granted New Jersey an extension of just over two weeks on the $271 million it owes for a scrapped rail tunnel project.

The extension was granted in a letter dated Monday to lawyers for the law firm New Jersey Transit hired to fight the debt.

Gov. Chris Christie killed the $8.7 billion tunnel project in October because of possible cost overruns. The federal government then demanded repayment of money already spent on the project.

Transportation Secretary Ray LaHood said recently that New Jersey would be credited $128 million to use on other projects if it pays the debt in full.

The law firm now has until Jan. 10 to submit a response.

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

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