Monday, October 11, 2010

The Unasked Question About the ARC Tunnel and Other Major Infrastructure Projects

There's one question that hasn't gotten enough attention in all the hoopla surrounding the decision by Gov. Chris Christie to cancel the ARC tunnel project and the subsequent 2-week reprieve.

Why is it that these projects continue to be pitched at a cost that turns out to significantly underestimate the costs for construction.

The ARC Tunnel was pitched as a $5 billion project. That mushroomed into a $8.7 billion project within just a few years, and now is expected to run $10 billion or more.

The project shouldn't be costing that much, not when real estate acquisition should be lower in the current real estate environment. Labor costs haven't risen due to a tight market. In fact, materials costs shouldn't be rising because demand is down as major projects are few and far between. So, what's the justification for the higher costs. No one can provide any reasonable explanation for the higher costs that makes sense in the current economic climate.

Some reports are lumping together several related projects together as a reason the cost has jumped, but that doesn't quite hold water when those projects were separately funded. The Portal Bridge project is an absolute necessity and Amtrak and NJ Transit need to undertake that project to improve the traffic on the Northeast Corridor irrespective of what happens with the ARC tunnel. That project will go on regardless of what happens with the ARC tunnel.

That question will be subsumed by those who are trying to restart the project and get it built. Restarting the project will mean rejiggering the financing and responsible parties. Some are suggesting that the feds take responsibility for what is essentially an interstate project rather than burdening New Jersey alone (New York isn't contributing anything, and the Port Authority and NJ Transit are putting forth a share, but New Jersey alone is on the hook for overruns, which is why Gov. Christie sought to can the project).

Then, there's the issue that some iteration of this proposal has been in the works for decades, and yet this version does nothing to alleviate the biggest problems on the Northeast Corridor - the lack of capacity into NY Penn Station, and building a wholly unnecessary terminus isn't the best way to spend limited funds.

Others commenting on the project include here.

No comments: