As I expected yesterday, Transportation Secretary Ray LaHood and New Jersey Governor Chris Christie are attempting to work out a deal to salvage the $8.7 billion ARC Tunnel between New Jersey and New York City.
The two sides have given a 2-week hiatus to work out some kind of a deal. Christie had called for shelving the project because the state had no way to pay for cost overruns beyond the $8.7 billion and the state would have been on the hook for all the overruns on the project. My expectation is that the feds will end up shouldering the cost overruns or at a minimum, split the share of overruns between the state, the federal government and the Port Authority.
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