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NJ Transit Questions FTA Bill for Tunnel Cash

Mon November 15, 2010 - National Edition
Beth DeFalco



NEWARK, N.J. (AP) NJ Transit isn’t ready to cut a $271 million check to repay the federal government for the scrapped Hudson River rail tunnel, the agency’s executive director said Nov. 10, two days after receiving a bill.

“We haven’t determined that we have to pay it back,’ James Weinstein said. “We don’t believe it is as clear-cut as the FTA would make it appear. There’s a difference of opinions.’

Weinstein declined to go into detail about what issues NJ Transit disputes because he said the agency is reviewing the request and assessing its options.

However, the language on what’s required if a project with an Early Systems Work Agreement, such as New Jersey had, is canceled is specific.

It says that if an applicant does not carry out the project “for reasons within the control of the applicant, the applicant shall repay all government payments made under the work agreement plus reasonable interest and penalty charges.’

The Federal Transit Administration on Nov. 8 sent the railroad the bill, not including interest and penalties, for the so-called Access to the Region’s Core project. It also said it was “deobligating’ the remaining $79 million of the $350 million it made available to help get the project started.

The federal government had committed $3 billion to the project, along with another $3 billion from the Port Authority of New York and New Jersey. The state’s share was $2.7 billion plus overruns.

The $8.7 billion project to construct a second rail tunnel between New Jersey and New York was 15 years in the making when Republican Gov. Chris Christie pulled the plug on Oct. 27, citing potential cost overruns. More than $600 million has already been spent on it for engineering, construction and environmental studies, Weinstein said.

State Sen. Paul Sarlo, the Democratic chairman of the Senate Budget and Appropriations Committee, said taxpayers need to know how the Christie administration plans to pay the bill and whether canceling the tunnel “will mean potholes elsewhere will go unfilled.”

Assembly Republican Conference Leader Jon Bramnick suggested that the FTA’s request for the money back was politically motivated.

“The demand by the federal government for New Jersey to return the $271 million that was spent on the project is a political move to embarrass Gov. Christie,” he said.

Asked if he thought the FTA’s decision to send the bill so quickly was a political stunt, Weinstein shot down the suggestion immediately.

“They are serious about what they do, this is not about stunts,” he said.

A majority of New Jersey voters agree with Christie’s decision to stop construction of the tunnel, according to a poll released Nov. 10.

In the Quinnipiac University poll, 53 percent support the governor’s decision, compared with 37 percent who disagree. Even commuters were split, with 50 percent backing Christie and 47 percent supporting the tunnel.

Amtrak and NJ Transit currently share a century-old, two-track tunnel under the river that has been at capacity for years. The killed project would have added two more tracks in a new tunnel.