- Associated Press - Thursday, October 7, 2010

TRENTON, N.J. | Gov. Chris Christie pulled the plug on a decades-in-the-making train tunnel connecting New Jersey and Manhattan, saying Thursday that his state can’t afford to pay for cost overruns on what is the largest federal transportation project in the country now under construction.

More than a half-billion dollars has been spent on the tunnel, and construction began last year. It was designed to double train traffic in and out of New York City during peak commute times once completed in 2018.

But over the years, the cost for the tunnel also has nearly doubled.

It started at $5 billion in 2005 and grew to $8.7 billion by 2008. In recent months, Federal Transit Administrator Peter M. Rogoff has made public statements that put the price tag between $9 billion and $10 billion. On Thursday, Mr. Christie, a Republican elected last year, said his advisers put the costs at $11 billion to $14 billion.

“The bottom line is this, New Jersey has gone for too long and for too many decades ordering things that [it] can’t pay for,” Mr. Christie said at a news conference. “This project has some flaws to it, but in the end, this is a financial decision. When weighing all the interests, I simply cannot put the taxpayers of the state of New Jersey on what would be a never-ending hook.”

New Jersey had committed $2.7 billion to the tunnel. The federal government and Port Authority of New York and New Jersey each had pledged $3 billion.

A month ago, Mr. Christie ordered a 30-day halt to all work on the tunnel over concerns that it would go over budget.

U.S. Transportation Secretary Ray LaHood’s spokeswoman indicated the project might not be dead. Olivia Alair said in an e-mailed statement that Mr. LaHood and Mr. Christie plan to meet Friday afternoon to “discuss a path forward on the ARC tunnel project.”

Proponents of the tunnel - dubbed Access to the Region’s Core, or ARC - assailed the Republican governor’s decision as shortsighted and wrongheaded.

“This devastating blow will hurt our state and its economy for generations to come,” said Assemblyman John Wisniewski, chairman of the state Democratic organization.

Mr. Wisniewski, who also leads the Assembly transportation panel, accused Mr. Christie’s advisers of inflating the cost of building the tunnel to justify the governor’s decision and divert the money to smaller road and rail projects.

The independent Regional Plan Association said Mr. Christie was using fuzzy math.

Gov. Christie’s claim that he supports ARC but could not move forward because of budget overruns is most likely not true,” the group said in a statement. “The Federal Transit Administration (FTA) officially never released its estimates for potential budget overruns - only Gov. Christie estimates them to be in the $3 billion to $5 billion range. What’s more, Trenton has repeatedly rebuffed federal officials’ efforts to work out a cost overrun deal.”

The project had been in the works for about 20 years. Currently, NJ Transit and Amtrak share a century-old two-track tunnel beneath the Hudson River. The new tunnel would add two more tracks, more than doubling the number of NJ Transit trains that could pass under the river.

Mark Nardolillo, chief executive officer of tunnel contractor BEM Systems in Chatham, N.J., said 10 to 15 employees he has working on it will lose their jobs and many others working on the project are at risk as well.

“We don’t have alternate work to put these people on,” said Mr. Nardolillo, whose firm handled environmental permits and data management for property acquisition. “This is the one job you counted on. It’ll have a devastating impact on the region.”

Commuters at New York’s Penn Station weren’t pleased to hear the project had been canceled.

“This is not good. I hope they reconsider,” said Michael Murphy, an intelligence-technology and infrastructure expert waiting for a train home to Morristown, N.J. But, he added, “if they have a problem with the budget, there’s not much choice.”

Roy Gainsburg, a retired book publisher from South Orange, N.J., who still rides into the city occasionally, said commuter trains frequently get stuck in the tunnel.

“It certainly would be nice if there was another tunnel, because this one has only two tracks, so trains get stuck at peak hours,” he said.

Mr. Christie’s predecessor, Democratic Gov. Jon Corzine, broke ground on the tunnel in June 2009, a few months before the gubernatorial election that he lost to Mr. Christie.

So far, about $600 million has been spent on the tunnel project. New Jersey could be on the hook to repay half of that to the federal government for breaking its commitment.