No Surprise that FTA Wants NJ To Repay ARC Tunnel Expenditures

It comes as no surprise that the Federal Transit Administration wants to recoup nearly $270 million that New Jersey spent before Gov. Chris Christie killed the ARC tunnel project because it would have exposed the state to billions of dollars in cost overruns.

The same agency that determines that New Jersey was required to pay in the first place is the same agency that determined that their original decision was correct. That's how these things work, but it doesn't mean the fight over the money is over by any stretch.

It ignores that Christie will still end up saving New Jersey taxpayers billions in dollars in exposure to cost overruns - overruns that the federal government refused to cover, even as it acknowledged the potential overruns could exceed their estimates and that NJ Transit was incapable of providing cost containment.

It is also instructive to look across the Hudson River to the Port Authority's PATH Transit hub and see what happens when cost overruns hit hard. That project was initially expected to cost $2.2 billion, and efforts were made to try and keep the cost from going above $2.8 billion. We're now at $3.4 billion and it is expected to eventually cost $3.8 billion. Those are costs that will be passed on to Port Authority customers in one form or another - whether it's higher rents for tenants, higher fares on PATH, or higher tolls at Port Authority bridges and tunnels.

New Jersey needs infrastructure improvements, but it cannot and should not break its bank to do so - and interstate projects should be completed with interstate assistance. That was sorely lacking in the ARC tunnel project, where New York was not putting up any funds - and the feds refused to backstop the cost overruns.

The successor project, the Gateway tunnel has a better arrangement for funding, and New Jersey taxpayers will not be on the hook for the overruns.

So, in the end, New Jersey taxpayers benefit from the killing of the ARC tunnel, Amtrak benefits with a tunnel project that does what the ARC was originally intended to do - expand Amtrak and NJ Transit access to Manhattan along with high speed rail improvements, and provide better access and coordination between the relevant agencies that are to carry out the construction of the project.

It's also instructive that the New Jersey congressional delegation isn't exactly pulling out the stops to get the FTA to back off the repayment - they'd rather see Gov. Christie embarrassed by all this rather than fighting to protect NJ taxpayers from a project that was ill-conceived by Gov. Corzine and which would have saddled NJ Transit with a boondoggle to rival that of the Secaucus Transfer (all while NJ Transit lacks an operating budget to run increased service to boot).