Friday, October 22, 2010

More Misinformation About ARC Tunnel Costs Emerge

It appears that Gov. Christ Christie has again delayed his decision to can the ARC tunnel project.

That comes on the heels of a Star Ledger report that claims Christie has conflated the Portal Bridge project with the ARC tunnel in coming up with a combined budget of $11 to $13 billion - cost overruns that total more than $3 to $5 billion and that the cost overruns for the ARC Tunnel are really about $1 billion. The headline is that the federal estimate is lower than what Christie continues stating.

Except that isn't what Transportation Secretary Ray LaHood has said. He gave a range of cost overruns for the ARC Tunnel starting at $1 billion - an amount that New Jersey still can't absorb. No figure was given for the high estimate.

Moreover, the Portal Bridge is facing cost overruns from the $750 million as originally proposed; the latest figures show $1.34 billion for the bridge replacement project. Both projects are necessary to eliminate choke points on the Northeast Corridor, but the ARC tunnel creates a different set of problems since the tunnel doesn't lead to space sufficient to handle the traffic flow expected down the road.

So, it doesn't matter whether Christie combined the two projects or not. The cost overruns are still there and they're still substantial enough to give the Governor pause on going forward with a project where New Jersey lacks the ability to absorb the cost overruns.

Then, the Star Ledger misstates the length of the tunnel. It claims that the tunnel is going to be nine miles long. That is a mischaracterization of the length. The physical length of the tunnel will be 3.5 miles including separate tunnels under North Bergen and then under the Hudson River into its terminus. By counting each tunnel boring separately, you get 9 miles (but by that estimate - the $10 billion Gotthard tunnel would be 70 miles in length; 35 miles multiplied by 2 tracks).

Water tunnel #3, linking New York City with upstate reservoirs is more than 60 miles long and costs $6 billion when it is completed in 2020. That project, which includes multiple tunnel boring machines, carving out huge connecting valve galleries to permit shutoff and maintenance of the first two tunnels with upstate reservoirs build early last century.

This project is poorly conceived, particularly on the Manhattan side, where the rail tunnel terminates under Herald Square and there is no place for trains to go once they have disembarked their passengers except back into New Jersey. There is no surplus storage, and the site is hemmed in by that water tunnel. The better route would have been to connect directly into Penn Station, where disembarked trains can then travel into Sunnyside Queens or utilize the space on the West Side.

Moreover, those citing the lower cost projections themselves caution that estimates are imprecise and are subject to revision. It never seems that those projections go down - only up. The Record indicates that the ARC tunnel was on budget through August 31, but notes that NJ Transit and the Federal Transportation Authority were both indicating a range for the completed project above the $8.7 billion.

That's why Gov. Christie is doing what he can to make sure that New Jersey taxpayers and commuters aren't on the hook for the higher costs.

Indeed, why is it that so many proponents of the project are pooh-poohing the $1 billion cost overage as though that is nothing to sneeze at. The New Jersey budget is roughly $32 billion, and will cost the state hundreds of millions in debt costs every year until it gets paid off (if ever - considering that all too frequently the debt gets refinanced to lower the immediate payment but lengthens the term of repayment considerably). Cost overruns need to be addressed, and proponents have not done a sufficient job of explaining why they are occurring here.

And it's curious why Assembly Transportation Chairman John Wisniewski (D-Middlesex) wants to compare the inability to build this tunnel with the Gotthard base tunnel project, when the costs per mile favor the Swiss project by a considerable margin. In fact, no one can explain why the costs for the ARC tunnel are so much higher per mile even when factoring in acquisition costs for real estate to carry out the project in Manhattan and New Jersey.

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