Ever Increasing Costs Threaten ARC Tunnel Project

New Jersey has temporarily halted work on the ARC Tunnel project that would add additional rail capacity between New Jersey and New York City under the Hudson River. The two-track tunnel would double the rail capacity, but would benefit only NJ Transit. It had been decided that NJ Transit would terminate the new tunnel at a new terminal under 34th Street at Herald Square instead of at Penn Station.

The cost for this project was estimated at $8.7 billion but there are already cost overruns and cost increases that are adding hundreds of millions to the overall cost and we're barely into the project. More to the point, the project isn't going to provide the kind of linkages that were originally envisioned for the project because it will not result in the kind of redundancy that a 4-track tunnel system to Penn Station would provide.

James Weinstein, New Jersey Transit's executive director, told The Star-Ledger of Newark that the monthlong suspension of all new activity will be used to re-examine the budget numbers. He also hopes to use the time to prove to all parties involved that the project's $8.7 billion cost estimate is accurate.

"During that 30 days, we're going to do a full evaluation of our go-forward costs," Weinstein said. "We feel pretty strongly that the current cost estimate, which is $8.7 billion, is a number we can achieve. But I'm under clear direction by (Gov. Chris Christie) that this is not going to be a bottomless pit. If we are to go forward, he wants to know the costs and budget are under control."

Work already under way on the tunnel, including a track underpass in North Bergen and a tunnel segment under the Palisades, will be allowed to continue during the suspension. But all new work, including real estate acquisition and the awarding of one major contract already bid, will be frozen.

The federal government and the Port Authority of New York and New Jersey already each are putting in $3 billion for the tunnel, which is the nation's largest transportation project. New Jersey's share is $2.7 billion.

However, the federal government could require the state to add hundreds of millions in contingency funds to the project budget, if it determines that insufficient money was budgeted to cover overruns. Their concerns over the tunnel's cost come in the wake of reviews of other high-profile New York regional transit project — some well over budget and significantly behind schedule.

The entire project is scheduled to be completed by late 2018 and will add two rail lines into New York from New Jersey. NJ Transit officials have said it will allow them to more than double the number of trains during peak commute times, from 23 to 48.

The need for additional capacity is critical and the infrastructure - the existing two tracks to Penn Station are in dire need for additional capacity and upgrades. However, the questions that aren't being asked are whether costs can be contained and whether it would make more sense to build to Penn Station.

NJ Transit is keen on the separate terminus, even though Amtrak has sought its own two-track addition at some point in the future. NJ Transit claims that it couldn't run the tracks to Penn Station because it might damage the existing tunnels that are more than 100 years old and that the cost would be even greater.

The project is being funded primarily from New Jersey and the Port Authority, but New York City and the state of New York are not making any contributions to the project, which has some New Jerseyeans upset over the imbalance. The federal government is also kicking in $3 billion.

Some 3 million cubic yards of rock and dirt will be removed during construction (about twice the amount removed during the building of the World Trade Center complex). Fortunately, NJ Transit has the perfect place to dump it: Kearny Yard, an 80-acre railcar storage yard by the Hackensack River. It will be used to raise the railroad yard some 20 feet above the surrounding flood plain.

A joint venture of Schiavone Construction Co., J.F. Shea Construction and Skanska USA Civil has received a contract totaling $259 million for the final design and construction of the Palisades tunnel; Ferreira Construction Co. of Branchburg, N.J., received $13.6 million to construct the Tonnelle Avenue underpass in North Bergen. In addition, a joint venture of Barnard Construction Co. of Pompton Plains, N.J., and Judlau Contracting Inc. is awaiting formal approval of its $583 million bid to build the 5,700-foot-long Manhattan tunnel segments; that work is to commence in 2014. Contracts for the 7,400-foot tunnel sections underneath the Hudson have not yet been set.

Those contracts will be unaffected by the freeze, but contracts down the road are threated - and the delays themselves can and will result in additional costs.

I'm surprised that more people haven't pointed out the folly of maintaining two separate 2-track systems that will terminate at separate unconnected terminals when a signal, power, or train malfunction in any one of those tracks can result in a shutdown and significant delays between New Jersey and New York. For instance, a train breaking down in the Hudson tube to New York can result in delays to Amtrak all along the Northeast Corridor and NJ Transit's NE corridor lines. That situation wouldn't change one iota. NJ Transit might see some improvement, but Amtrak would still suffer massive delays. If all four tracks went to Penn Station, a delay or train malfunction could be better handled to reduce the effect on the customers of both Amtrak and NJ Transit.