Coalition Calls for Affordable Trans-Hudson Project

Coalition Calls for Affordable Trans-Hudson Project, As Feds Demand “ARC” Money Back from NJT

Just as the Lackawanna Coalition made the case in New England for an affordable project that would bring a new rail tunnel into New York’s Penn Station to improve regional connectivity, the Federal Transit Administration (FTA) reiterated its demand that New Jersey repay $271 million that it had advanced to New Jersey Transit for the former “ARC” project.

There is little dispute that New Jersey rail riders should have an enhanced railroad and a new tunnel to New York Penn Station, and the Lackawanna Coalition insists that it can and should be built for an affordable price. The Coalition has advocated for such a project since before Gov. Chris Christie terminated the former “ARC” project last fall.  Christie halted work on the project, which would have included a new “deep-cavern” terminal 20 stories below 34th Street in Manhattan, because of its excessive cost.  He also noted that the project was “flawed” because it did not go to Penn Station or connect with Amtrak and could not be extended to the East Side of Midtown.  This past February, Amtrak proposed its Gateway Project, which would bring new tracks into a stub-end annex adjacent to Penn Station, but its price tag is equally high and no source of funding has been identified for it.

On Friday, April 29, Coalition Technical Director Joseph M. Clift made the case for the affordable alternative at a regional rail conference at New Haven, Conn., saying that better connectivity between New England and south of New York can be built for a reasonable price.  Within hours of his presentation, the FTA repeated its demand that NJT repay the federal money that had been advanced to NJT for engineering and construction work on the ARC Project, under an Early Systems Work Agreement (ESWA).

The FTA argues that NJT knew what it was getting into when it accepted funds under the ESWA, so it should pay back the Feds.  NJT says that the significant cost increases that caused the project to be terminated were beyond its control, so it should not be required to repay the money that had been advanced.  It appears that both of these arguments are strong enough to allow a case to proceed, if it goes to court.

When NJT sought federal funding for the project during the former Corzine administration, only the Lackawanna Coalition and a few other rider advocates doubted that the project would be funded.  Almost everyone else on the political and transit scenes expected the FTA to give the project a Full-Finding Grant Agreement (FFGA) for $3 billion, so NJT felt that it would be safe to request an advance on funding and start work on the project.

Last October, when it became clear that the entire project could not be built for the $8.7 billion that had stood as the previously-accepted cost, Christie terminated the project.  By then, it appeared that the project would cost $11 to $13 billion. The FTA then demanded the return of the money that had been advanced.

Disputes of this sort are usually settled, eventually.  Under current circumstances, it does not appear that the dispute between NJT and the FTA will be settled anytime soon.