State billed $271M for scrapped tunnel

TRENTON - New Jersey owes the federal government more than $271 million after canceling a rail tunnel connecting the state with New York, according to a debt notice obtained Monday.

The letter from the Federal Transit Administration's chief financial officer to NJ Transit's executive director demands payment of $271,101,291 by Dec. 24.

It's money the government wants New Jersey to pay for work done on the Hudson River tunnel before Gov. Christie terminated the project. The notification, acquired by the Associated Press, follows a warning this month estimating the charges.

"FTA demands payment in full within 30 days from the date of this letter, hereinafter referred to as the 'delinquency date,' " according to the Nov. 24 letter.

NJ Transit Executive Director Jim Weinstein said this month that the state hadn't determined whether it would have to repay any money.

NJ Transit, which ran the project, has the right to a review of the charges and to dispute all or part of the debt. If the state allows the debt to become delinquent, however, it could be assessed interest and penalties.

Christie spokesman Michael Drewniak would not say Monday whether the charges would be paid in full or disputed or where New Jersey would get the funds if it did repay some or all of the money.

The $8.7 billion project to construct a second rail tunnel between New Jersey and New York - known as Access to the Region's Core, or ARC - was 15 years in the making when Christie pulled the plug Oct. 27, citing potential cost overruns.

More than $600 million was spent for engineering, construction, and environmental studies.

The federal government and the Port Authority of New York and New Jersey each committed $3 billion to the project. New Jersey's portion was $2.7 billion. The state and Port Authority were responsible for overruns, which Christie said could add $2 billion to $5 billion to the price.

The tunnel was intended to supplement a century-old two-track tunnel under the Hudson that is at capacity. It was to handle up to 25 NJ Transit commuter trains per hour in peak periods; without it, New Jersey is left with a tunnel that can handle 23 Amtrak and NJ Transit trains.

Christie has since said he would consider contributing to a cheaper alternative: extending New York's No. 7 subway line under the river to New Jersey.

Assemblyman John Wisniewski, who chairs the New Jersey Democratic State Committee and heads the House transportation committee, questioned Christie's financial acumen.

"We now know that his looking out for our financial interests will cost New Jersey taxpayers at least $271 million," said Wisniewski, of Middlesex County. "The governor has now pledged New Jersey money to help finance New York's subway expansion without even seeing a plan or a cost estimate. It doesn't seem like he's being much of a financial watchdog, only a theatrical bulldog."

In April, Weinstein received word that NJ Transit's request for $206 million more in start-up money had been approved. The approval letter, sent from an FTA regional administrator, also raised financial issues, including how New Jersey intended to fund its capital road-repair program administered through the Transportation Trust Fund, which is nearly broke.