The $8.7-billion project could come in up to $1 billion over budget. (Map courtesy of The Star Ledger)
The State of New Jersey is shutting down all new work on the Trans-Hudson Express Tunnel for 30 days to assess the project’s budget. Officials believe the project, with its $8.7-billion price tag, could see budget overrans of up to $1 billion, and the state simply does not have the money to foot that bill, The Star-Ledger reported last night. The fate of the project and the state’s plan of action after this 30-day review is up remain unclear.
Despite its flaws, this tunnel, the centerpiece of the plan known as the Access to the Region’s Core, remains a key piece of New York’s infrastructure expansion plans, and New Jersey Transit has imposed this 30-day moratorium at the behest of the Federal Transit Administration. Officials hope that the review shows a project on or close to budget. “During that 30 days, we’re going to do a full evaluation of our go-forward costs,” NJ Transit Executive Director James Weinstein said. He later added, “The governor has made it clear to me that this project must stay on time and on budget. Anything short of that is unacceptable. During the next 30 days we will work to meet that directive.”
The tunnel is currently under construction with work proceeding apace in North Bergen and under the Palisades. While these aspects of the project will be permitted to go forward, no new bids will be accepted or contracts issued until the 30 days are up. While nothing specific to the ARC Tunnel’s plans have triggered this review period, FTA officials have compared it to the now-late and over-budget East Side Access and Second Ave. Subway digs. Ted Sherman of The Star-Ledger has more:
[T]he estimated cost of the new tunnels has steadily climbed since the project was first approved. The initial projection in 2005 was $5 billion. As recently as 2008, the Federal Transit Administration had asked the state to put in as much as $1.1 billion in contingency expenses to accommodate potential increases in construction costs and interest rates, bringing the price tag from $7.6 billion up to $8.7 billion.
The new questions over the tunnel’s cost come in the wake of reviews by the FTA of other high-profile New York regional transit project — some well over budget and significantly behind schedule. According to FTA projections, the Long Island Rail Road’s $7.3 billion East Side Access project was $800 million over budget and more than 18 months behind schedule. And the plan to create a Second Avenue subway line was found to be roughly $500 million over budget, and now 14 months behind schedule.
The federal agency has not yet come up with its projections on the Trans-Hudson Express Tunnel, said Weinstein. But following a five-month review, it told the state that “based on experience with other major tunneling-projects in the region, additional contingency factors could impact the project’s overall cost estimate.” Weinstein expects to meet soon with Peter Rogoff, administrator of the FTA, who in public statements has been pegging the tunnel cost at between $9 billion and $10 billion.
When — or if — completed, this new tunnel will allow 48 trains per hour to enter New York City from New Jersey. That would represent an increase of over 100 percent of current capacity, but the new tunnel, as Sherman notes, “does not add any capacity to Amtrak” and will feed New Jersey Transit trains into only a new terminal west of Penn Station and not Grand Central.
Still, New Jersey politicians are concerned with this development. “This stoppage could put billions of dollars in federal funding at risk. These funds are dedicated to New Jersey and could deprive the state of thousands of desperately needed good-paying jobs,” Senator Frank Lautenberg said. “We have worked hard together for years with the state of New Jersey and the federal government to advance this project, which is critical for New Jersey’s economy and our future.”
Other transit advocates too voiced their concerns for the future of this project. “It casts a dark shadow over the project’s future,” Kate Slevin head of the Tri-State Transportation Campaign said to The Times. “This calls into question the Christie administration’s commitment.”
New Jersey officials remain committed to the project on the record, but as Sherman points out, New Jersey’s transit money is in scarce supply. The Transportation Trust Fund has nearly run dry; New Jersey Transit recently enacted steep fare hikes and service cuts; and the political will to raise gas taxes, which haven’t kept up with inflation or the state’s fiscal needs, is non-existent.
Reportedly, this review will not impact the projected 2018 completion date, but that could easily change over the next 30 days. “My fear,” Jeffrey Zupan of the Regional Plan Association, said to The Times, “is New Jersey will say, ‘Oh, it costs just too much,’ and delay it further. That would be awful.”