NJ Transit could lose $150 million

January 26, 2009 11:16:12 AM PST
NJ Transit officials say the agency could lose $150 million if a troubled insurance firm collapses. Officials said Monday that the possible collapse of AIG could upend more than a dozen complicated equipment leases and force the agency to pay $150 million to a host of banks.

In recent months the New York-based AIG has had credit downgrades and billions of dollars of bailout money pumped into it by the federal government.

NJ Transit Executive Director Richard Sarles told a state Assembly committee that the agency would not raise fares to cover the loss, but would instead defer capital projects.

Chief Financial Officer Charles Wedel says that under a hypothetical fare hike, prices would need to rise by at least 10 percent to cover the $150 million loss.

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