Thursday, October 07, 2010

Gov. Christie Set To Can ARC Tunnel Project? UPDATE: Done Deal

New Jersey Governor Chris Christie is in a major bind. He is apparently on the cusp of killing a major infrastructure improvement that would benefit New Jersey commuters, the ARC Tunnel project, which would construct the first new rail tunnel connections into Manhattan in decades.

His main objection is the cost. The project is running at least $8.7 billion, and the project overruns are likely to be considerable and the state is on the hook for those overruns.

The state can't afford to pay for the overruns in the current budget structure.

Don't expect Christie to sign off on an increase in the gas tax to cover the project either, even though that could be seen as a prudent step. New Jersey hasn't raised the gas tax since the 1980s, and is third lowest in the nation. Of course, that is more than offset by the highest property taxes in the nation and one of the worst overall tax burdens in the nation. Moreover raising the gas tax a penny would raise only $50 million a year - a drop in the bucket compared with the billions needed to cover the construction and infrastructure and would also translate in to higher transportation, shipping, and cost of living for all New Jerseyeans.

New York isn't going to pick up the tab either, even though it would benefit from the additional rail links.

What I see is that Gov. Christie is playing politics to get the feds to pick up a greater share of the costs - particularly on cost overruns when the state is unable to cover the costs. It may come down to who blinks first - and I don't think that Christie will can the project because of the jobs at stake.

That doesn't meant that the project as currently arranged is without objection.

It isn't.

My main objection to the project is that the rail links do not create additional capacity at Penn Station, but instead funnel traffic South to Herald Square. It doesn't provide the kind of redundancy one would expect from doubling the number of tracks into Manhattan because the tracks would lead to a separate train terminus. The separate station at Herald Square was deemed a necessity by NJ Transit because of concern over stability of the two existing rail tunnels during the construction of the new tunnels.

The problem is that Amtrak is contemplating its own additional two tracks into Penn Station, which makes one wonder how exactly Amtrak would manage to get the additional tracks at some point in the future when NJ Transit is unwilling to do so.

The better option would be to build the tracks into Penn Station and make sure that Amtrak and the feds pick up the cost overruns - that would not only allow the project to continue (and several hundred million in contracts have already been let out), but would be a jobs program and serve to improve regional infrastructure where the youngest rail tunnels are 100 years old.

The new tracks and tunnel should lead into the Moniyhan station at the former Farley Post Office Building across from Madison Square Garden. Instead, NJ Transit is hoping to set up its own separate fiefdom that not only doesn't truly add redundancy, but would be subject to many of the same problems with the current setup.

With only two tracks, any delay or disabled train on one track would back up all trains entering the station because there would not be a way to work around the problem. Four tracks would provide the redundancy necessary to route around potential problems like disabled trains (which are an all too common occurrence).

Christie has indeed pulled the plug on the project, because of projected cost overruns on an already bloated budget that was originally going to cost $5 billion but which was last projected at $8.7 billion. The expectation was that budget overruns would push that figure up to $10 billion, and New Jersey would have to cough up the funds, which the state simply doesn't have and which it cannot afford.

Moreover, the ARC project groundbreaking took place just as Corzine was in the midst of a reelection campaign, so he was hoping to benefit from the project politically, even though the state would have no way to pay for it.

It's good to see a politician trying to exercise fiscal discipline, something that has been sorely lacking in New Jersey and at NJ Transit.

NJ Transit has been a poor steward of limited resources, and has spent hundreds of millions of dollars more on the Secaucus Project than it otherwise should have. I mention the Secaucus Transfer only because one of the goals of the ARC tunnel was to make the Secaucus station obsolete because trains would be able to travel directly into Manhattan, eliminating the need for transfers between trains bound for Hoboken to those heading to NY Penn.

No, what needs to happen now is for the feds, Amtrak, NJ Transit, Port Authority and New Jersey to pool their resources to build the tunnel as originally envisioned to Penn Station and do so under the limited budget constraints. That means eliminating the separate terminal at Herald Square and eliminating the need for Amtrak to build its own multibillion dollar tunnel to Penn Station.

No comments: