Sources Say New Jersey Gov. Christie to Pull Plug on Hudson River Tunnel

The $8.7 billion trans-Hudson river transit tunnel project is expected to be killed later this week by Gov. Chris Christie, according to several sources familiar with the project. Barring any last minute reprieve, Gov. Christie will announce later this week that he's pulling the plug on the transit tunnel, known as the ARC project, which would have connected New Jersey to Manhattan.

New Jersey has already committed $2.7 billion towards the project, with the rest coming from the federal government and the Port Authority. Construction got underway in June 2009, but last month, Christie halted the project, saying he wanted to review costs.

Now several sources say Christie has made up his mind that it's just too risky -- and that he needs the money for roads.

Speaking at a campaign event for Republican gubernatorial hopeful Bill Brady of Illinois, Christie says he's made no decision -- but he made his thinking clear.

"I was alerted to the fact that there were potential for significant cost overruns, and New Jersey's broke. And the federal government made it clear that New Jersey will be on the hook for any cost overruns on the project," Christie says.

NJ Transit, the Port Authority, and the Federal Transit Administration declined to comment.

On Monday, New Jersey's top transportation official said the state might divert money from the ARC project to Garden State roadways. Transportation Commissioner Jim Simpson told legislators that the state could reallocate more than $2 billion from the project.

"You've got that billion coming in, $100 million a year, that is rededicated, flexed to ARC," he said. "So if ARC didn't happen, there's a billion dollars, a pot of money, for roads and bridges and things like that."

But the region could lose $6 billion from the federal government and the Port Authority says those allocated funds are specific to the project. Simpson said the decision to continue or cancel the ARC tunnel would be made on its own merits.

Simpson made his comments before a legislative committee. The committee approved a $1.7 billion financing package, allowing work to resume on other road and bridge projects around the state after a one-day moratorium.