NJ temporarily halts work on tunnel project

September 13, 2010 4:16:17 AM PDT
New Jersey has temporarily halted all new work and suspended additional contract bids on an $8.7 billion rail tunnel to Manhattan.

The decision comes amid concern from federal officials that the project may go as much as a billion dollars over budget - money New Jersey doesn't have.

James Weinstein, New Jersey Transit's executive director, told The Star-Ledger of Newark that the monthlong suspension of all new activity will be used to re-examine the budget numbers. He also hopes to use the time to prove to all parties involved that the project's $8.7 billion cost estimate is accurate.

"During that 30 days, we're going to do a full evaluation of our go-forward costs," Weinstein said. "We feel pretty strongly that the current cost estimate, which is $8.7 billion, is a number we can achieve. But I'm under clear direction by (Gov. Chris Christie) that this is not going to be a bottomless pit. If we are to go forward, he wants to know the costs and budget are under control."

Work already under way on the tunnel, including a track underpass in North Bergen and a tunnel segment under the Palisades, will be allowed to continue during the suspension. But all new work, including real estate acquisition and the awarding of one major contract already bid, will be frozen.

The federal government and the Port Authority of New York and New Jersey already each are putting in $3 billion for the tunnel, which is the nation's largest transportation project. New Jersey's share is $2.7 billion.

However, the federal government could require the state to add hundreds of millions in contingency funds to the project budget, if it determines that insufficient money was budgeted to cover overruns. Their concerns over the tunnel's cost come in the wake of reviews of other high-profile New York regional transit project - some well over budget and significantly behind schedule.

The entire project is scheduled to be completed by late 2018 and will add two rail lines into New York from New Jersey. NJ Transit officials have said it will allow them to more than double the number of trains during peak commute times, from 23 to 48.

U.S. Sen. Frank Lautenberg, D-N.J., a longtime transportation advocate, hopes the issues that led to the temporary stoppage can be quickly resolved.

"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," he told the newspaper. "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."