NJ governor shifting focus to state road projects

TRENTON, N.J. - October 28, 2010

The Republican governor, who burnished a national reputation for cost-cutting by putting his foot down on the $9 billion-plus tunnel, told 200 people at a town hall meeting in Moorestown it's time to pay for improvements to state infrastructure, sometimes rated among the worst in the country.

"We need to start investing money in that and improving that first," Christie said. "And if we find partners in the future like the city and state of New York, like Amtrak, like the federal government, who want to partner with us on the tunnel, I'm happy to listen to them. But if it's to benefit the region, then the region has to pay not just New Jersey."

It's the closest Christie has come to validating what some tunnel proponents claim was the Republican's primary motivation for killing the tunnel. They say he wanted to use the money to replenish the state's nearly broke state transportation fund; the tunnel's demise frees up least $1.25 billion.

Christie has ruled out raising the state gasoline tax to help solve the state's transportation budget woes. At 14.5 cents per gallon, New Jersey's gas tax is among the lowest in the country, behind only Alaska, Georgia and Wyoming.

The tunnel was intended to supplement a century-old two-track tunnel under the Hudson River that has been at capacity for years. The new tunnel would have been able to handle an extra 25 NJ Transit commuter trains per hour during peak periods; without it, New Jersey is left a tunnel that can handle 23 Amtrak and NJ Transit trains.

More than 625,000 people trek into Manhattan from New Jersey each work day, about 185,000 by rail, and even a minor delay can translate into long waits. On Monday, an eight-car train derailed outside New York's Penn Station, snarling the evening commute.

Construction began last year on the tunnel, which has been in the works for 20 years.

Christie had said Wednesday that he was sticking by a decision more than two weeks ago to kill the project because of runaway costs. He rejected a variety of financial proposals offered by the federal government to salvage the tunnel, saying none fully relieved New Jersey of responsibility for overruns.

The Port Authority of New York and New Jersey was contributing $3 billion; New Jersey's share was $2.7 billion plus overruns. New Jersey will have to repay the federal government up to $350 million of the money already spent.

"I said to them it's all about money," Christie said during Millennium Radio's "Ask the Governor" program. "I can't have a blank check, so they knew if they came back and said they'd cover all the overages, the project would have gone forward. If the federal government would have ever come forward and said 'we will take the risk of it going over budget and we'll cover it,' I would have had a very different press conference."

Sen. Frank Lautenberg, a Democrat who helped secure federal money for the project, disputed Christie's account of the financing deals.

"The governor has once again put politics over performance," Lautenberg said.

The Obama administration persuaded Christie to rethink the decision and two weeks later proposed options to keep the tunnel on track. The proposals - all rejected by Christie - included low-interest federal loans; a scaling-back of the project; and the use of public-private partnerships, which other cities have formed for large infrastructure projects.

A law firm representing international transportation investors sent an Oct. 22 letter to a Christie ally expressing interest in exploring a partnership with the state. Christie vetoed it because it involved payback - with interest - to investors.

U.S. Transportation Secretary Ray LaHood's final offer came during a meeting Sunday: $358 million in additional federal money. The state and the Port Authority were each expected to put up similar amounts.

LaHood also disputed Christie's account of the financing deals as others expressed shock that the Republican governor was turning down $3 billion in federal funding. Transportation advocates, train riders, union leaders and some Democrats criticized the decision as shortsighted, and contractors reeled at the loss of work in an industry with staggering unemployment.

Timothy Barnard, CEO of Barnard Construction Co. of Bozeman, Mont., which shared a half-billion-dollar contract to drill the final phase of the tunnel from Manhattan's West Side to underneath Penn Station, said his company spent $1 million preparing its bid and another $3 million since last November when the bid was accepted.

"To say it's very disappointing would be an understatement," Barnard said Wednesday.

Barnard said his company employs 300 to 1,500 people depending on what projects it takes on; the cancellation of the tunnel means the company won't be adding employees as it had planned to do, he said.


Associated Press Writer David Porter in Newark contributed to this report.

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