It's Official: ARC Tunnel Project Is Dead

New Jersey Gov. Chris Christie has cancelled plans for a new rail tunnel between New Jersey and Manhattan's Penn Station. The tunnel was supposed to more than double the number of commuter trains that could come into New York City and relieve many of the delays that passengers experience every morning.

"The current economic climate in New Jersey does not allow for this project to continue,"  the Republican governor says.

Christie put the project on hold last month to undertake a detailed cost review. On Thursday, he says that analysis showed that instead of costing $8.7 billion, the real cost will be closer to $12 to $15 billion.

Although the federal government would have paid for a large portion of the tunnel, New Jersey and the Port Authority would have been responsible for cost overruns. Christie says he's not letting New Jersey residents -- who he says are the most heavily taxed in the country -- take on that burden.

The Federal commitment to the project was capped at $3 billion. Christie says his administration will seek other ways to modernize and improve rail capacity.

The tunnel broke ground last summer, and so far, New Jersey has spent almost half a billion dollars on it. The state expects to get reimbursed for part of that from the Federal Transit Administration. The FTA wouldn't comment except to say that Transportation Secretary Ray LaHood expects to speak with Christie Firday to "discuss a path forward."


New Jersey residents have mixed feeling about the demise of a tunnel that could have seriously cut down their commute time.

John Adams says New Jersey needs the infrastructure:

"It's been postponed for too many years already, " Adams says. "I'd like to see it go through, albeit it's going to be expensive. We know that, but we need it."

Lydia Di Guido agrees with Christie that if the state doesn't  have the money, then the tunnel should be a no-go:

"I wouldn't start an addition to my home if I couldn't finish it, so why would I want NJ state to do that," DiGuido says. "The way I run my home is the way we should run the government, If you can't afford it, don't do it."

Updated 3:10 p.m.