As the Bush administration ends and area governments confront daunting budget gaps, what’s being called the nation’s most important public transportation project, a massive New Jersey Transit tunnel planned under the Hudson River, faces significant hurdles to funding and construction. Delays could send its already $7.6 billion price tag soaring.
Known as Access to the Region’s Core (ARC), it is the largest individual transportation project in the New York area by dollars, and would double the railroad’s capacity, allowing for 80,000 more riders daily, with a new river crossing and a fresh set of platforms by Pennsylvania Station.
But given the enormous scale of the project—the $7.6 billion currently estimated is over $3 billion more costly than the first segment of the Second Avenue Subway—any lengthy delays, ultimately leading to overruns, could mean hundreds of millions or perhaps billions more in public dollars should the estimates prove inadequate.
A preliminary analysis by the Federal Transit Administration found the cost of the project was estimated to span from the $7.6 billion to more than $10 billion depending on a variety of potential roadblocks during planning and construction, according to a government official familiar with the analysis.
With the project slated to start in 2009, any delays would be certain to push those figures upward given the constant escalation in construction costs. Officials are worried about potential delays in Washington, as the F.T.A. does not currently have enough money to fund the project.
New Jersey Transit spokesman Dan Stessel said the agency will work with the F.T.A. to monitor costs as the project moves forward, but there are concerns about securing funding in coming months.
“We are concerned and have been communicating with the F.T.A. about the importance of meeting the project schedule to avoid costly and unnecessary delays,” he said. “We will work with them and talk to them about all the things that we will do to ensure that the numbers that we are projecting stay as consistent as possible.”
Still, any delays in the project mean almost automatic cost overruns given inflation, not to mention that every other large transportation infrastructure project in the area has seen major overruns. Earlier this year, the M.T.A. said it needed another $900 million to complete a set of $7 billion new tunnels under the East River; and the $900 million Fulton Street Transit Center project needed at least another $300 million.
ARC is bigger than all of these, and should the price tag top $10 billion, the tunnel would cost more than it took to complete the entire Washington, D.C., subway in the 1970s, in unadjusted dollars.
Still, transportation advocates and officials on both sides of the Hudson—though far more of them on the western—are quick to rally behind the cause, given its potential benefit to both sides of the river. More capacity into Manhattan makes New Jersey a more desirable location, which in turn means a larger workforce for New York.
“The project is probably the most important public transportation project in the country,” James Simpson, the F.T.A.’s administrator, told The Observer. “The benefits accruing to New Yorkers and folks in New Jersey are so great that the project has to happen.”
CONCEIVED DECADES AGO, the project is founded on the notion of dealing with a growing population of suburban New Jersey commuters, as the one set of passenger rail tunnels currently under the Hudson is at capacity during peak hours. Delays on a single train have a cascading effect on the long line of others behind it; seats fill during peak hours; and cranky commuters pack the Penn Station waiting areas during the afternoon rush. The other users of the tracks under Penn Station, Amtrak and the Long Island Rail Road, have similar experiences.
ARC—the tunnel has also been adorned with the unusual acronym THE, standing for Trans-Hudson Express—would give New Jersey Transit a completely new station with six tracks just north of Penn Station under 34th Street, between Seventh and Eighth avenues. The tunnel would run deep under the Hudson, under the planned extension of the No. 7 subway line on Manhattan’s West Side, and into the new station some 150 feet below ground.
The tracks would not connect to Penn Station tracks—a sore point for many transit advocates and Amtrak, which has criticized the plan for its lack of redundancy should something happen to one of the two tunnel systems. As the region and rail ridership grow, capacity could be better expanded with a connection between the two systems, those critics argue, though New Jersey Transit has said the connection costs would be prohibitive.
Political support for the tunnel is strong, with New Jersey Governor Jon Corzine making it a key issue and the U.S. senators from both states offering strong support.
Within the past year, the tunnel has taken on a new momentum as it received commitments for more than half the money needed. The Port Authority of New York and New Jersey has now committed $3 billion; and New Jersey has committed about $1.5 billion, leaving another $3 billion, based on the working price tag of $7.6 billion.
For that balance, the project’s sponsors are looking to the F.T.A., a funding route marked by uncertainty as the Bush administration leaves office.
The F.T.A. has given the project a “medium-high” rating on its list of priorities, placing it near the top of its pile of funding applications. But some notable potential barriers remain, mostly stemming from the fact that a new administration with new priorities will arrive in January. Under the traditional funding mechanism, the agency cannot commit money to a project until the environmental review is complete, a step not expected to be done until the fall, according to the F.T.A.
If the F.T.A. completes the environmental review by 2009, then it is not entirely clear where the agency would come up with the money to commit to the project, as its pot for such projects is running dry, and it does not have enough authorized money remaining to fund the $3 billion desired for ARC.
To allow for more F.T.A. money, Congress could pass legislation that would replenish the authority to fund the project in some manner, as it has done in past years. However, it’s unclear how quickly such legislation could pass through Washington, or how much more the F.T.A. could be authorized to spend in a time of glaring federal budget gaps and a shrinking level of revenue from a gas tax that feeds into the federal Highway Trust Fund.
“We’ve got a shortfall in the Highway Trust Fund,” Mr. Simpson, the F.T.A. administrator, said. “These are different times, so Congress will have to address it.”
In a statement, Frank Lautenberg, the senior senator from New Jersey, said, “I was glad to secure federal funding for this new tunnel and will continue fighting for the funding we need for this and other critical transit projects. Building this new tunnel will help keep cars off the road, reduce our reliance on foreign oil and preserve the quality of life in our region.”
Should federal funding fall short, or the project become swallowed in cost overruns, it is unclear where the additional money would come from, especially at a time when both New York and New Jersey face tight budgets, and New York itself faces multibillion dollar holes in M.T.A. projects.
“The State of New York is not trying to take on new responsibilities,” said Robert Yaro, president of the Regional Plan Association. “At the moment, they can’t afford to create their own mega-projects.”
Still, Mr. Yaro said the tunnel project has such strong support in New Jersey that he sees it as likely that the elected officials there would do what they can to bring in new money.
“It’s become clear to everybody that if we’re going to clear the airports, we’ve got to increase capacity on the Northeast corridor,” he said, “and this is one of the key things that you need to do to achieve that goal.”