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10/28/2010



Rail News: Passenger Rail

New Jersey governor officially terminates ARC project


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Yesterday, New Jersey Gov. Chris Christie announced he accepted the recommendation of New Jersey Transit Executive Director Jim Weinstein to terminate the Access to the Region’s Core (ARC) project, which called for building two new tunnels under the Hudson River, new tracks between Secaucus Junction and New York’s Penn Station, and a new station beneath 34th Street in Manhattan.

After negotiating with federal and state stakeholders, the parties could not reach an agreement on terms that would ensure New Jersey taxpayers wouldn’t pay more than $2.7 billion for the project, Christie said in a prepared statement.

The project’s original cost estimate was $8.7 billion. The Federal Transit Administration and Port Authority of New York and New Jersey each committed $3 billion toward the ARC project, and New Jersey Transit was charged with covering the remainder. However, project costs since have soared to between $10.9 billion and $13.7 billion, not including $775 million that New Jersey would have to spend to build the Portal Bridge South, which is an integral part of the ARC project, according to the governor’s press release.

NJ Transit would have to pay all costs above the $8.7 billion initial estimate in order to qualify for the federal share of the project. The federal New Starts contribution to the project would be capped at $3.4 billion, regardless of the ultimate project cost, according to a memo Weinstein sent to Christie on Oct. 26.

Earlier this month, Christie announced he was terminating the project. However, he then met with U.S. Transportation Secretary Ray LaHood to discuss options for salvaging the project and agreed to let NJ Transit staff members review the options.

“The value and benefit that a cross-Hudson transportation improvement would bring to New Jersey and the entire region is not in question,” the memo read. “However, at a time when New Jersey’s economy is under extreme stress and the financial strength of the state is at a low point, the taxpayers are in no position to bear the open-ended cost for this project that would be required to obtain a Full Funding Grant Agreement from the FTA.”


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