Monday, October 18, 2010

Where ARC Tunnel Proponents Fail To Grasp Fiscal Responsibility

Proponents to the ARC tunnel have good reason to be upset over the potential elimination of the project. It would presumably double the rail traffic that could flow into Manhattan from New Jersey. That's a good thing and would improve the redundancy by eliminating a chokepoint on the Northeast Corridor and therefore reduce delays and improve service.

What's missed by the proponents is the cost to increase service. New Jersey Transit has reduced service because its operational budget can't afford the existing level of service. That includes services like the woefully underutilized River Line and operating costs for the Secaucus Transfer.

If the tunnel is built, NJ Transit does not have the budget to cover the increased costs of operating the tunnel and terminus in New York. That is fiscally irresponsible and is an issue completely aside from the capital construction costs and the concerns made by Gov. Christie.

Alfred Doblin of the Record notes that poor plans don't get better with age, and cites the higher costs of the project as being a legitimate reason to sack the project as it is currently conceived. Proponents are claiming that Gov. Christie has lumped together the Portal Bridge in the cost of building the ARC tunnel when citing ultimate costs of $11-14 billion.

That's nonsense.

The Portal Bridge, which is an essential project just South of Secaucus is a huge problem on the Northeast Corridor. Problems with the bridge can result in massive delays on its two track right of way. The replacement bridge project is expected to cost $750 million and is a separate deal.

Even if Christie lumped the two projects together, it ignores that the $8.7 billion project is now running anywhere from $10 billion to $13 billion (as opposed to $11 to $14 billion). That's on top of the already bloated budgeting estimates previously reported from when the project was originally released as a $5 billion project.

NJ Transit can't keep the costs contained, and they have no interest in keeping costs down since the state picks up that tab. Amtrak has no interest (and no money) in this project. The Port Authority has no interest in keeping the costs down since New Jersey picks up the tab. Only New Jersey is in a position to demand cost accountability.

There's something fundamentally wrong with infrastructure projects in the region when so few stakeholders in the project have a vested interest in keeping the costs contained and limiting taxpayers and commuters from higher costs.

It's for these reasons that the project needs to be addressed on its costs and sustainability once completed. Building a new tunnel is essential, but it can't be built unless costs are contained and NJ Transit can show that it has budgeted for operating the tunnels once completed.

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