Federal Transit Administration will launch audit project
An NJ Transit train passes the now-abandoned construction site for the ARC Tunnel in North Bergen in this October file photo. NJ Transit is being asked to return $271 million to the federal government it was given for the project.NEWARK — NJ Transit owes the federal government at least $271 million for the Hudson River rail tunnel that Gov. Chris Christie scrapped last month, a federal official says.
The $8.7 billion project to construct a rail tunnel between New Jersey and New York was 15 years in the making when Christie pulled the plug on Oct. 27, citing potential cost overruns.
The Federal Transit Administration on Monday sent the railroad the bill for the so-called Access to the Region's Core project.
"NJT must immediately repay all the Federal financial assistance expended for ARC under the (work agreement) which is currently estimated to be $271.091 million, plus reasonable interest and penalty charges that will be determined by FTA," regional administrator Brigid Hynes-Cherin wrote in the letter to James Weinstein, executive director of NJ Transit.
FTA also said it would launch an audit of the project to determine how much federal funds have not yet been spent.
The Record newspaper first reported on the letter.
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 Federal Transportation Administration had agreed to spend $350 million for the tunnel. In the letter, it said it was "deobligating" the remaining $79 million of that commitment.
NJ Transit officials said Tuesday the agency would release a statement later. Officials weren't saying where the state will get the money to pay the bill. However, $1.25 billion of the $2.7 billion the state had committed to the project from toll increases could soon become available.
At least one state — New York — is already going after the $3 billion that the federal government had committed to the Hudson River rail. U.S. Sen. Kirsten Gillibrand, D-NY, has asked Transportation Secretary Ray LaHood to redirect the money to the Long Island Rail Road's East Side Access Project and the construction of the Second Avenue subway line.
Previous coverage:
• Amtrak, NJ Transit discuss partnership to build canceled ARC Hudson River tunnel
• Paul Mulshine: Cost comparison shows the ARC tunnel plan has more holes in it than Swiss cheese