Time flies when you’re trying to save a tunnel.
Six weeks ago, New Jersey Gov. Chris Christie announced plans to halt work on the ARC Tunnel to assess its costs. He claimed, without providing much evidence, that cost overruns could be as great as $5 billion and that the State of New Jersey could not continue with the project under those budgetary assumptions. Two weeks ago, he canceled the project due to this same claim after state officials conducted a bare-bones analysis of this project. When Ray Lahood, President Obama’s Secretary of Transportation, stepped in, Christie agreed to conduct a two-week review, but just a few days ago, it sounded as though the tunnel would be scraped for good this week.
Now that the day of reckoning for the ARC Tunnel has arrived, the drama is far from over. New Jersey politicians are parrying with the governor over his fuzzy math, and FTA sources have seemingly leaked their strategy to the media. Both the state and federal officials claim that Christie’s claims of $5 billion in cost overruns are simply a figment of his imagination.
Item #1: NJ State Assembly Transportation Chair John Wisniewski requested a series of documents from the Governor and found no evidence of current cost overruns. “The documents provided by the governor’s own administration fail to provide any justification for the governor’s claim of billions in cost overruns on the tunnel project,” Wisniewski said in a statement yesterday. “That claim seems as though it was simply pulled out of thin air by the governor. The governor is risking New Jersey’s economic future with numbers that, at least according to these documents, have no basis in reality.”
Item #2: The federal estimates that Christie claims project a $5 billion increase in the cost of the ARC Tunnel actually show only a $1 billion increase, and the feds are willing to work with Christie to reach a compromise on the funding. The Star-Ledger elaborated:
Among the added incentives LaHood may offer to keep the nation’s largest public works project alive are federal high-speed rail grants and cost-sharing with Amtrak to expand rail capacity, said those close to the project. They asked not to be named because they are not at liberty to discuss the talks publicly…
Those close to the project said it was during the meeting two weeks ago that LaHood told the governor the low estimate for the project was $9.7 billion. Part of the reason for the differing numbers is that Christie’s figures include $800 million to build two tracks along a new bridge over the Hackensack River just south of the existing Portal Bridge between Kearny and Secaucus. The 100-year-old bridge is in disrepair and is so low it is often opened to allow commercial boats underneath, leading to delays.
Federal officials have counted the tunnel and Portal Bridge projects as separate entities, while Christie has maintained they are joined at the hip and should be counted in the same cost estimate. Including the Portal Bridge, the estimate LaHood gave Christie was $10.6 billion to $13.5 billion, said a third person familiar with the talks. The governor has continued to use the higher cost projections in his public criticism of the project.
Although federal transportation officials have seethed over Christie’s use of the higher projections even after his meeting with LaHood, they had kept the $9.7 billion figure a closely guarded secret because of the transportation secretary’s belief he could conciliate with Christie.
It’s clear by now that Christie simply wants to kill the project so he can beef up the state’s depleted Transportation Trust Fund. What the numbers actually say is of little concern to the New Jersey governor.
In reality, Christie could point to the ARC Tunnel’s cost projections. Take a look:
Originally, the conceptual-level construction cost estimate came in at $4.3 billion, but that number, state officials said a few weeks ago, should be discarded. It doesn’t include real estate costs, escalation of contingency planning. In 2007, though, the project was pegged at $7.4 billion, but by January 2009, at the urging of the FTA, the ARC Tunnel’s price tag rose to $8.7 billion. It has, despite the right-most column in this chart, remained there for the last two years, and even if the feds believe it could cost $9.7 billion, that increase is a modest one compared Christie’s claims of a $5 billion overrun.
Unfortunately, these revelations, clearly leaked on purpose by the FTA on the eve of its meeting with Christie, are a last-gasp effort to shame the governor into reversing his decision. It’s a risky political gambit, and one that won’t work. As he’s shown time and again, Christie will stick to his guns, for better or worse, once he makes a decision, and he doesn’t appear willing to move forward with ARC.
So if this is the end, what next? The project itself suffered from some design flaws, but there is little doubt that this new Hudson River rail crossing is a must for economic, transportation and sustainability purposes. It’s taken 20 years of planning to get to the point where contracts have been awarded and work begun, and Christie could wipe out that progress with one word tomorrow. The region will come to regret it.