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N.J. governor kills Hudson River tunnel project

By the CNN Wire Staff
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New Jersey governor scraps tunnel plans
STORY HIGHLIGHTS
  • NEW: Decision will hurt New Jersey, analyst says
  • Governor: The project was expected to exceed its budget
  • The tunnel project was put on hold last month
  • $600 million already spent on the project may not be reimbursed
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(CNN) -- New Jersey Gov. Chris Christie killed plans for a new train tunnel to connect his state with New York's Manhattan island Thursday, saying billions of dollars in possible cost overruns made the project "completely unthinkable."

The $8.7 billion tunnel beneath the Hudson River was the largest public works project in the United States, but Christie said it was likely to cost up to $5 billion more than estimated. In a statement announcing his plan to withdraw from the project, he said the tunnel "costs far more than New Jersey taxpayers can afford, and the only prudent move is to end this project."

"I have made a pledge to the people of New Jersey that on my watch I will not allow taxpayers to fund projects that run over budget with no clear way of how these costs will be paid for," said Christie, a Republican elected in 2009. "Considering the unprecedented fiscal and economic climate our state is facing, it is completely unthinkable to borrow more money and leave taxpayers responsible for billions in cost overruns."

The tunnel, dubbed the Access to the Region's Core project, was aimed at doubling the number of commuter trains between New York and New Jersey and increasing the number of Amtrak trains serving the Northeast Corridor. It would have included an expansion of New York's Penn Station, created 6,000 jobs and taken 22,000 cars off the road, according to New Jersey Transit and the Port Authority of New York and New Jersey.

Thomas Wright, the head of the Regional Plan Association, said Christie's decision "is really going to take a hit on New Jersey's economic growth." He said the $5 billion estimate for overruns that Christie cited is overstated, with the actual number being closer to $1 billion.

"This is a potential overrun that's many years down the road. It should not have been used as the excuse to kill this project," he said.

The Port Authority and the Federal Transit Administration each put up $3 billion for the Access to the Region's Core project, with the state of New Jersey adding in $2.7 billion. The project also was partially funded by federal stimulus money.

"New Jersey definitely has extreme financial burdens that they are dealing with," said Wright, the executive director of the transportation and urban planning think tank. "However, Access to the Region's Core was one project that was very well funded from federal and bi-state sources. Very little of the money was actually coming from New Jersey citizens."

Opponents of the planned tunnel said they would rather see New Jersey's share of the money go to the state's Transportation Trust Fund, which is rapidly running out of money.

Supporters of the project proposed covering any budget shortfalls with a surcharge on train tickets or an increase in New Jersey's gasoline tax, the third-lowest in the country. But Christie has said he's opposed to raising gasoline taxes.

Christie said he has asked his state transportation commissioner and the head of the New Jersey Transit agency to work with federal and regional officials to find other ways to boost commuter capacity. "However, any future project must recognize the regional and national scale of such an effort and work within the scope of the state's current fiscal and economic realities," he added.

Christie had put a 30-day hold on the project in September to re-evaluate it. Wednesday, Department of Transportation spokesman Brian Farber said that Christie and U.S. Transportation Secretary Ray LaHood had spoken by telephone and "agreed to have staff work together to further refine the estimated cost of the entire project, and those conversations are ongoing."

Now that the project has been killed, the Federal Transit Administration could redirect its funds to other projects across the United States. The $600 million already spent on the project may not be reimbursed.

CNN's Steve Kastenbaum, Eden Pontz and Brian Todd contributed to this report.

 
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