Officials: NJ-NY tunnel cost estimate is $9.77B

The cost of building a rail tunnel between New Jersey and New York City is estimated at $9.77 billion, some $4 billion less than the worst-case estimate the governor of New Jersey cited when he canceled the project two weeks ago, three government officials told The Associated Press on Thursday.

The officials, who have direct knowledge of the tunnel but are not authorized to speak publicly about it, said Gov. Chris Christie was given the revised cost estimate after he pulled the plug on the massive public works project, citing runaway costs.

"This represents everybody's best thinking," one of the government officials said of the latest cost estimate, whereas the higher number "imagines a set of facts that you don't know to be the case."

The governor has continued to say publicly that the project could ultimately cost taxpayers $11 billion to $14 billion or more, or as much as $5 billion over budget. He said so again Wednesday while campaigning for Republican Rep. Charlie Dent in Pennsylvania.

"You may have read about this $8.7 billion tunnel that's being planned up in New Jersey to go into New York," Christie told the crowd. "And, listen, it's not a bad idea, but it's now running $2 (billion) to $5 billion over its original estimate - typical government work. I have said 'no' because I don't have the money."

An official in the Christie administration said $9.7 billion is on the low end of a $3 billion range and does not include construction of a portal bridge, which adds $775 million. The bridge, a new swing span over the Hackensack River, is a separate project and has not been included in previous estimates for the tunnel. However, Christie includes the bridge costs in his estimate, said the official, who is not authorized to speak publicly about the project.

Christie spokesman Michael Drewniak said the bridge is an essential part of the project and cannot be removed when calculating the tunnel costs.

The Federal Transit Administration also gave Christie a more probable estimate of just over $10 billion.

Christie gave the tunnel project a two-week reprieve Oct. 8 after meeting with U.S. Transportation Secretary Ray LaHood. The reprieve ends Friday.

Christie and LaHood had been expected to chat Friday but Christie's office said late Thursday that the governor had no meetings scheduled. LaHood said during a conference call this week that federal and state officials have each held several work sessions and that he would present the results of their efforts to the governor.

Federal officials have been trying to work out a compromise to keep the project on track. But one official said the federal efforts don't appear to have swayed Christie.

Christie has indicated it would be revived only if someone else helped cover the costs. Otherwise, he said he'd be comfortable walking away.

Christie, who has built a national reputation as a fiscal conservative, scrapped the nation's largest public works project because he said New Jersey is broke and unable to pay for it.

The state's share is $2.7 billion plus overruns. The federal government and Port Authority of New York and New Jersey are each kicking in $3 billion. New York City's local and state governments are not contributing.

Federal officials have drawn up a list of elements of the project that could be deferred. A possible public-private partnership has also been discussed.

Sen. Frank Lautenberg, D-N.J., who helped secure the federal money for the project, said last week he had spoken with an investment firm about the tunnel's value. Lautenberg said investors potentially would be interested in buildings, hotels and retail around the tunnel.

Separately, business leaders with an interest in seeing the project go forward have presented a proposal to New Jersey and federal officials that could shield the state and the FTA from some overruns.

So far, the project is on budget. The most recent monthly progress report, issued Oct. 5, lists the project costs at $8.7 billion.

The figure includes a contingency budget of more than $1 billion to pay for higher-than-expected costs for things like property acquisition and heavy equipment.

Christie hasn't adequately explained his claim that the tunnel could run up to $5 billion over budget, the head of the Transportation Committee in the New Jersey Assembly said Thursday.

Assemblyman John Wisniewski said he found no justification for Christie's cost overrun estimate in hundreds of pages of documents provided by the administration. Democrats obtained the documents through a public records request.

Wisniewski, who like some others believes Christie wants to cancel the tunnel so he can use New Jersey's share of the money to replenish the state's broke transportation fund, said the cost revelations "raise serious questions about the governor's credibility and motive on this key transportation issue."

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Associated Press Writer Joan Lowy in Washington contributed to this report.