N.J. governor stands by decision to kill $9 billion tunnel project

TRENTON, N.J. -- The biggest public works project in the U.S. -- a $9 billion-plus train tunnel connecting New Jersey and New York City -- is dead in its tracks.

New Jersey Gov. Chris Christie said Wednesday he is sticking by a decision announced earlier this month to kill the project because of runaway costs. He rejected a variety of financial proposals offered by the federal government to salvage the tunnel under the Hudson River, saying none of them fully relieved New Jersey of responsibility for overruns.

"It's a dollars-and-cents issue. I cannot place upon the citizens of the state of New Jersey an open-ended letter of credit," Christie said.

The decision to abandon construction more than a year after it began burnished the Republican governor's reputation as a cost-cutter but was criticized as foolishly shortsighted by transportation advocates, train riders, union leaders and some Democrats. It also leaves New Jersey with nothing but a $600 million hole in the side of the hill.

Supporters of the project -- an idea that has been on the drawing board for about 20 years -- said it would create 6,000 construction jobs and thousands more jobs afterward, as well as ease train delays in a region with one of the nation's longest commute times.

Currently, Amtrak and NJ Transit, the state's commuter railroad, share a single, century-old tunnel underneath the river that has been at capacity for years. Just this week, a derailment outside New York's Penn Station snarled the commute for tens of thousands of people.

U.S. Transportation Secretary Ray LaHood, who had implored Christie to reconsider, called the decision "a devastating blow to thousands of workers, millions of commuters and the state's economic future." He said commuters will see "no end to traffic congestion and ever-longer wait times on train platforms."

Sen. Frank Lautenberg, a New Jersey Democrat who helped secure federal funding for the tunnel, said: "The governor has once again put politics over performance."

Christie essentially had the last word on the project because it couldn't go forward without New Jersey's contribution. NJ Transit was running the project.

The project broke ground under Democratic Gov. Jon Corzine, who lost to Christie last fall. The federal government and the Port Authority of New York and New Jersey had each committed $3 billion to building the tunnel. New Jersey was responsible for $2.7 billion plus any additional costs.

But in recent weeks the potential overruns had been estimated at anywhere from $1 billion to more than $5 billion.

After Christie announced he was pulling the plug, the Obama administration persuaded him to rethink the decision and proposed a variety of options for keeping the tunnel on track, including federal loans, a scaling-back of the project, and the use of public-private partnerships, which other cities have formed for large infrastructure projects.

But in a memo to Christie, NJ transit director James Weinstein said that working out such a partnership would take 18 months, and even then there would be no assurance that New Jersey would like the price or terms.

A law firm representing international transportation investors sent an Oct. 22 letter to a Christie ally expressing interest in exploring a partnership with the state. Christie vetoed it because it involved payback -- with interest -- to investors.

Christie said LaHood's final offer came during a meeting Sunday: $358 million in additional federal money. The state and the Port Authority were each expected to put up similar amounts.

Christie said he rejected the various options because none of them let New Jerseyans off the hook for additional payments.

He did raise one bit of hope Wednesday -- forming a partnership with Amtrak to build a new tunnel -- then stressed that no substantive discussions had taken place.

New Jersey will have to repay the federal government up to $350 million of the money already spent.

The cancellation frees up the $3 billion in federal funds and leaves several potential benefactors, including transit projects in Los Angeles, Denver, San Francisco, the Washington suburbs and New York City. New York is trying to complete a new subway line on Manhattan's East Side.

More than 625,000 people trek into Manhattan from New Jersey each work day, about 185,000 by rail, and even a minor delay translates into long waits.

Sylvia Sims, who commutes every weekday from her home in Newark to her nursing job in New Brunswick, was fuming about the announcement from Christie, who has also done battle with the powerful New Jersey teachers union over his cost-cutting efforts and has become a rising star in the GOP because of it.

"At least three days a week the trains are late, so you're late, and you don't get paid for being late, it's ridiculous, and half the time the escalators don't work," Sims said. "But when you're a fat joker like that, who has it all laid out for you, you don't think about the little people. I think he's the most inconsiderate governor we've had."

Kalpit Patel of Edison, a civil engineer who commutes by NJ Transit to Newark, said he doesn't blame the governor: "If we have to do that project, who is going to give all that money? We don't have money, and it's going to cost taxpayers eventually."

"The governor can open any high school history text to see why his decision to kill the tunnel is so foolish," said state Senate President Stephen M. Sweeney, a Democrat. "Imagine where our country would be if it were not for the backbone built by 200 years of investments in roads, canals, railroads or the interstates."