Earlier today, Governor Chris Christie announced his intention to remain steadfast in his earlier decision to cancel the ARC Tunnel project, citing New Jersey’s lack of funding.
Two weeks ago, Christie chose to pull the plug on the ARC Tunnel project, a project 20 years in the works. Just one day after making this fateful decision, Christie elected to take some time to reconsider at the urging of Transportation Secretary Ray LaHood. Since this time, many have been anxiously awaiting this announcement, and just as many are disappointed. In a statement expressing his own dismay at the outcome, LaHood lamented:
I am extremely disappointed in Governor Christie’s decision to abandon the ARC [T]unnel project, which is a devastating blow to thousands of workers, millions of commuters and the state’s economic future. The [G]overnor’s decision to stop work on this project means commuters – who would have saved 45 minutes each day thanks to the ARC tunnel – will instead see no end to traffic congestion and ever-longer wait times on train platforms. Our DOT team has worked hard over the last several weeks to present Governor Christie with workable solutions to bring the ARC tunnel to life. I want to thank Senators Lautenberg and Menendez for their tireless efforts on behalf of this important project.
Christie and LaHood met this past weekend to discuss the future of the ARC Tunnel, and the federal government even offered to pour an additional $378 million into the project. Other funding options, such as loan options of $2.3 billion with the possibility of $1.85 billion in financing from a public-private partnership, were discussed by the pair. However, Christie ultimately determined that it was financially not in the best interest of New Jersey to continue construction, stating that “[w]e are still going to have to pay for the cost of it . . . I cannot place upon the citizens of New Jersey an open-ended letter of credit.” Christie had hoped that some other party, such as the federal government, the State of New York or New York City, would step up to cover the costs of overruns. The estimated cost of the ARC Tunnel Project was $9 billion, with New Jersey and the Port Authority of New York each expected to contribute $3 billion. Had the project continued, the state would have been responsible for overruns of $2.7 billion or more.
President of the Regional Plan Association Bob Yaro stated that Christie’s decision is “a real tragedy for New Jersey, and for the metropolitan area, and for the country,” adding that, “[i]n the end there were no overruns that the federal government and the Port Authority and the state couldn’t manage.”
Construction began on the rail tunnel under the Hudson River last summer. Although Christie’s decision to cancel the ARC Tunnel project could ultimately save the state billions of dollars, New Jersey will be forced to pay back the $350 million it was given to start the project. Until its cancellation, the project was the largest public works project in the country.