N.J. tells feds: We don’t owe you $271M


New Jersey told Washington Tuesday night – in legal terms – why it need not repay $271 million related to the now-canceled ARC transportation project.  

In essence, the governor’s office argues in its submission that the Federal Transit Administration greatly overstates the amount of money in dispute and is acting beyond the boundaries of its authority. 

“Government payments do not have to be repaid if the  project   does not go forward for reasons outside of NJT’s control, which is what occurred here,’’ the filing states with regard to N.J. Transit. 

Gov. Christie put the brakes on the Hudson River tunnel project because its cost would greatly exceed the $8.7 billion cost that parties had agreed on, and Christie said that he would not commit cash-strapped New Jersey to yet one more red-ink project. 

In addition, the state argues that the Federal Transit Administration changed cost estimates, pushing the price tag as high as $13.7 billion. 

Christie’s office argues that it was the FTA that controlled the project methodology, assumptions and estimates, but wants the state to pay money for a project that neither the state nor the Port Authority could afford.

And the state argues that even if some money was due to be repaid, it would have to be limited to approximately $45 million under the statute’s “new starts’’ provision.

“Compelling NJT to repay these funds will force NJT to cancel projects it can afford to undertake to reduce congestion, enhance the condition of critical infrastructure and create needed jobs,’’ the filing argues.

In addition, the state argues that more than $200 million was expended in preliminary engineering and design work that predated the August 2009 statute regarding this project.

Assemblyman John Wisniewski, (D-19) of Sayreville, who chairs the Transportation, Public Works and Independent Authorities Committee, said Wednesday that he is rooting for the state to succeed in not having to repay the money or in paying a reduced amount.

“That being said,” Wisniweski added, “this is litigation that would have been unnecessary had the project gone ahead. The penalty being disputed is a penalty the state had agreed to when (James) Simpson was head of FTA.’’ 

Simpson was named administrator of the FTA in August 2006, and became commissioner at the state Department of Transportation in early 2010.

In its filing, the state acknowledges the growing transit demands in the congested northern area of the state.

“Transit ridership in the Trans-Hudson corridor is projected to double over the next 20 years,’’ and the engineering studies performed already will prove valuable for future initiatives, the state argues.



N.J. tells feds: We don’t owe you $271M