Footing the Bill for the Cancelled ARC Project

And the tab is substantial: $271 million. NJ Gov. Christie, who killed the trans-Hudson, $9 billion rail tunnel for financial reasons, is now left owing funds for work completed that his state would not be liable for had he not canceled the project.

Rail tunnel design and engineering work totaling almost $600 million was completed since the prior governor, John Corzine, authorized the project, and was paid by the Federal Transit Authority, the Port Authority of NY and NJ, and the state of NJ. The FTA is demanding repayment of their share since Christie canceled the tunnel project on Oct. 26 citing concerns about being liable for cost overruns.

"The letter (from the Federal Transit Administration) to NJ Transit Executive Director James Weinstein demands "payment in full, 30 days from the date of this letter.'' It threatens the state with interest penalties for being overdue and with turning the account over to a collection agency, the U.S. Department of Justice. The FTA also warned that if the debt becomes delinquent, it may hurt the state's credit rating.

One possibility is to have the congressional delegation negotiate to reduce the debt or have it forgiven. Lawmakers had forgiven a $140 million debt to construct high-occupancy vehicle lanes on Interstates 287 and 80, which were converted to to regular use in 1998."

Thanks to E&E Publishing - Greenwire

Full Story: NJ must pay $271M for killing rail tunnel



Irvin Dawid's picture

Update from NJ: Challenge to 'ARC Tab'

AP reports via Philadelphia Inquirer: NJ to challenge feds over $271M tunnel bill, Dec. 2:
As noted here (above), it was the Asbury Park Press who broke the story on FTA getting serious - now Christie is responding by retaining a Washington law firm to get out from under this bill - which of course may only add to their tab.
I think Christie needs to be shown the ramifications of his decisions. Sen. Lautenberg warned him of this financial commitment, but Christie is opposed to ARC. I suspect he's also opposed to transit....Irvin Dawid, Palo Alto, CA

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