NJ Republican Gov must pay 271 Mil for canceling tunnel project

[dmcowen674]

11-29-2010

http://news.yahoo.com/s/ap/20101129/ap_on_bi_ge/us_trans_hudson_tunnel

NJ must pay $271M to feds for killing tunnel to NY

New Jersey owes the federal government more than $271 million after canceling a rail tunnel connecting the state with New York, according to a debt notice obtained Monday by The Associated Press. The letter from the Federal Transit Administration's chief financial officer to executive director demands payment of $271,101,291 by Dec. 24.


It's money the government wants New Jersey to repay for work done on the Hudson River tunnel before Republican Gov. Chris Christie terminated the project.



The notification follows a warning letter earlier this month estimating the charges.
"FTA demands payment in full within 30 days from the date of this letter, hereinafter referred to as the 'delinquency date,'" the letter states. The letter was dated Nov. 24.


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Well how do you like that New Jerseyians?

Have to pay all that and get nothing for it but stuck in the same traffic.

 

[classy]

This guy is a disaster. Not one answer for anything. Not one resolution for one problem. Just arguing and nonsense. I voted for this fat clown thinking he would be a better governor. Not only does he suck, he is also a disgrace to the state with his behavior here and abroad. Corzine just sucked being a governor, but tubby here is joke all-around. And not only do we need to finish the project, he canceled it with not much proof that it would be an over-spent project.


So with this 270 million dollar bill, this fat bastard also cost us the tax payers $400 million losing the government aid. So that is 671 million donut boy has cost us.

 

[manimal]

Lol 10 bucks ol chubs is gonna get on tv and scream....

 

[WHAMPOM]

Republicans can run big government right into the ground, proof, proof, proof!

 

[Throckmorton]

Isn't the reason he shut down the project that the federal government saddled NJ and NY with with 100% of the cost overruns? Or is that just his spin?

 

[Brainonska511]

Isn't the reason he shut down the project that the federal government saddled NJ and NY with with 100% of the cost overruns? Or is that just his spin?

Well, NJ would be saddled with any cost overruns, but I haven't seen any evidence that the project would run over budget.

 

[ThatsABigOne]

Politicians are only here to get reelected. Nothing new here. Everyone knows this.

 

[Throckmorton]

Well, NJ would be saddled with any cost overruns, but I haven't seen any evidence that the project would run over budget.

The article I read back when he pulled out said that there were big overruns. Not true?

 

[101mpg]

This sounds a lot like what happened with the bay bridge project in California...

http://en.wikipedia.org/wiki/Easter...an_Francisco_%E2%80%93_Oakland_Bay_Bridge

Originally estimated to cost $1.1 billion, now projected to cost $6.2 billion...nah, what cost overruns?

 

[MotF Bane]

Well, NJ would be saddled with any cost overruns, but I haven't seen any evidence that the project would run over budget.

It always does.

 

[K1052]

The article I read back when he pulled out said that there were big overruns. Not true?

The latest legit estimate was that the project would run about $1B over budget which NJ would owe, though it would be all buried in bonds stretched out over decades at low interest rates. Additionally the state was promised about $900M in ancillary NJ rail projects as an offset, which Christie rejected As far a huge projects go it wasn't going to be hugely overspent...particularly for the benefits it would have provided over the next century.

Christie knew the state would immediately go on the hook for 250-300M due to the terms of the agreement with the Feds. Assuming the state fails to pay quickly the interest rate jumps to 6%. If the unpaid debt goes on affects the state's borrowing rates then you could easily see a overall cost that is MUCH greater than the state would have incurred by following through.

 

[K1052]

This sounds a lot like what happened with the bay bridge project in California...

http://en.wikipedia.org/wiki/Easter...an_Francisco_%E2%80%93_Oakland_Bay_Bridge

Originally estimated to cost $1.1 billion, now projected to cost $6.2 billion...nah, what cost overruns?

not really, the Bay Bridge is a disaster of Caltrans making...plus it's in the Bay Area where getting anything done costs at least twice as much and takes 3 times as long

Nothing in the engineering or construction of ARC hadn't been done before multiple times in the area. The unknowns were rather few and the design conventional.

 

[CPA]

The latest legit estimate was that the project would run about $1B over budget which NJ would owe, though it would be all buried in bonds stretched out over decades at low interest rates. Additionally the state was promised about $900M in ancillary NJ rail projects as an offset, which Christie rejected As far a huge projects go it wasn't going to be hugely overspent...particularly for the benefits it would have provided over the next century.

Christie knew the state would immediately go on the hook for 250-300M due to the terms of the agreement with the Feds. Assuming the state fails to pay quickly the interest rate jumps to 6%. If the unpaid debt goes on affects the state's borrowing rates then you could easily see a overall cost that is MUCH greater than the state would have incurred by following through.

So, what you are saying is that a state that is already saddled with huge debt obligations and budget deficits decided against more debt and taking the least of two evils against it's budget. Doubtful that the repayment will go into default (probably be financed with similar low interest bonds). Sounds like a wise decision to me.

$900 in ancillary rail projects, eh? until those costs balloon into the billions and NJ is stuck with the overage just like the tunnel. Again, sounds like a smart decision to me.

 

[BlahBlahYouToo]

everyone knows that the costs will easily go over the projected numbers.
i believe i read a poll that the majority of NJ'ers agreed with Christie.
it's a good call IMO.

 

[JS80]

$271m payment to someone you can stiff without consequence is cheaper than paying 11ty billion dollars to build something that will never get finished.

 

[K1052]

So, what you are saying is that a state that is already saddled with huge debt obligations and budget deficits decided against more debt and taking the least of two evils against it's budget. Doubtful that the repayment will go into default (probably be financed with similar low interest bonds). Sounds like a wise decision to me.

$900 in ancillary rail projects, eh? until those costs balloon into the billions and NJ is stuck with the overage just like the tunnel. Again, sounds like a smart decision to me.

The debt is payable now and not offset by any revenue generating asset. Even if the state lays out bonds to pay off the debt the interest rate won't be anywhere near as low. You get different interest rates when you're buying a house than when you need a payday loan.

A conservative estimate on the property value gains as a result of the new tunnels becoming operational and cutting commute times by half for a number of lines was estimated at $18B. Not to mention all the money those commuters would spend in their home communities. Many many billions over the next couple decades.

There also is the inconvenient fact that the Hudson tunnels are at capacity. NJT can move no more commuters into the city. Also they are 100 years old. The alternative PATH will also be at capacity once their upgrades to the signal systems are complete and headways are reduced. In short, NJ will have no good way to move additional people into and out of NYC for 20 years at least.

The MTA meanwhile is pouring money into improvements that will make Long Island and routes off the Metro-North Railroad far more attractive than a multi-seat triple length commute from Jersey. Essentially Christie has forfeited the next decade or two's growth to NY and CT.

The 900M was for various bridge replacements that need to happen on NJT/
Amtrak infrastructure in the state, further reducing commute time and increasing reliability.

 

[nageov3t]

people moving to Long Island and making houses in NJ worth less?

A++ idea, would vote for Christie again :thumbsup:

 

[manimal]

people moving to Long Island and making houses in NJ worth less?

A++ idea, would vote for Christie again :thumbsup:

property values will definitely be affected. Any change affects pricing and something this big means its almost a certainty.

We left Los Angeles because the commutes were too long..

 

[JSt0rm]

$271m payment to someone you can stiff without consequence is cheaper than paying 11ty billion dollars to build something that will never get finished.

Ah now the cut taxes and spending makes sense!! you guys just never planned on paying.

/golf clap

 

[ShawnD1]

$271m payment to someone you can stiff without consequence is cheaper than paying 11ty billion dollars to build something that will never get finished.

No consequence? NJ could be cock blocked from future federal money.

 

[K1052]

people moving to Long Island and making houses in NJ worth less?

A++ idea, would vote for Christie again :thumbsup:

Good if you don't own property, not so good if you do or will.

Then again without those people paying taxes the state would slide further down the shitter.

 

[Pulsar]

The debt is payable now and not offset by any revenue generating asset. Even if the state lays out bonds to pay off the debt the interest rate won't be anywhere near as low. You get different interest rates when you're buying a house than when you need a payday loan.

A conservative estimate on the property value gains as a result of the new tunnels becoming operational and cutting commute times by half for a number of lines was estimated at $18B. Not to mention all the money those commuters would spend in their home communities. Many many billions over the next couple decades.

There also is the inconvenient fact that the Hudson tunnels are at capacity. NJT can move no more commuters into the city. Also they are 100 years old. The alternative PATH will also be at capacity once their upgrades to the signal systems are complete and headways are reduced. In short, NJ will have no good way to move additional people into and out of NYC for 20 years at least.

The MTA meanwhile is pouring money into improvements that will make Long Island and routes off the Metro-North Railroad far more attractive than a multi-seat triple length commute from Jersey. Essentially Christie has forfeited the next decade or two's growth to NY and CT.

The 900M was for various bridge replacements that need to happen on NJT/
Amtrak infrastructure in the state, further reducing commute time and increasing reliability.

When someone starts talking like this to me my eyes glaze over, because at the end I already know what's coming. It's a sales pitch.

When someone says "I don't have the money", the financial folks jump right in with their input on how this debt is good debt, it will pay itself off. Here's all the upsides to the debt, it's really a good thing and not large in the grand scheme of things. It will do all these wonderful things for us. Not only will it vacuum the floor, it will make your life better while doing it for just 4 low payments of $19.95. (With the disclaimer that one missed payment quadruples the cost).

Once they're done with their pitch, I very gently kick their asses out the door.

Our country is bankrupt. Our cities are bankrupt. Our currency is falling in value very quickly. If a house was run this way they would have declared insolvency a long time ago. Instead our country has a whole fleet of financial gurus who know how to hide the zeros and carry the ones and have convinced folks they can have their cake and eat it to. And then get paid for that cake.

No money means no money. What don't you folks get about that? Do you really think you're going to convince me that spending money we don't have (trillions and trillions and counting) is good for us or future generations?

Most New Jersians like Christie. I sure as hell like a guy who starts cancelling shit that he knows they can't pay for. He deserves applause.

 

[K1052]

When someone starts talking like this to me my eyes glaze over, because at the end I already know what's coming. It's a sales pitch.

When someone says "I don't have the money", the financial folks jump right in with their input on how this debt is good debt, it will pay itself off. Here's all the upsides to the debt, it's really a good thing and not large in the grand scheme of things. It will do all these wonderful things for us. Not only will it vacuum the floor, it will make your life better while doing it for just 4 low payments of $19.95. (With the disclaimer that one missed payment quadruples the cost).

Once they're done with their pitch, I very gently kick their asses out the door.

Our country is bankrupt. Our cities are bankrupt. Our currency is falling in value very quickly. If a house was run this way they would have declared insolvency a long time ago. Instead our country has a whole fleet of financial gurus who know how to hide the zeros and carry the ones and have convinced folks they can have their cake and eat it to. And then get paid for that cake.

No money means no money. What don't you folks get about that? Do you really think you're going to convince me that spending money we don't have (trillions and trillions and counting) is good for us or future generations?

Most New Jersians like Christie. I sure as hell like a guy who starts cancelling shit that he knows they can't pay for. He deserves applause.

You mean someone informed and in possession of the facts? I know that has to be boring but do try and keep up.

Remember you said this when he dumps 200M into Xanadu. If ever there was a white elephant....

Dismissing the financing of major vital infrastructure projects as a financial game that is a net loss for the state involved is a major leap of ignorance. Anything meaningful must be financed or it will never be done.

Also, where do you think that money is going to go? NY is going to be laughing all the way to the bank when it gets the 3B federal contribution intended for ARC applied to the East Side Access and the 2nd Ave subway.

 

[lothar]

If the FEDs are so comfortable in their own estimates on the NJ rail projects, why don't they make themselves 100% responsible for any cost overruns or at least share 50:50 rather than making NJ 100% responsible for it?

 

[K1052]

If the FEDs are so comfortable in their own estimates on the NJ rail projects, why don't they make themselves 100% responsible for any cost overruns or at least share 50:50 rather than making NJ 100% responsible for it?

Because NJT was doing the construction. The Feds and the PA were already putting up 3B apiece.