N.J. settles with U.S. DOT over cancelled tunnel project

State pays agency $95 million for money that was marked for ARC project

Transportation Management News U.S. DOT September 30, 2011
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U.S. Transportation Secretary Ray LaHood announced on Sept. 30 that he has signed an agreement with New Jersey Gov. Chris Christie for the state to reimburse the federal government $95 million for money that was supposed to be spent building the ARC Tunnel construction project.

New Jersey terminated the project and the U.S. DOT has been seeking repayment of $271 million in federal dollars spent by the state on the project.

The $95 million settlement will permit the U.S. DOT to recover all of the $51 million in New Starts money provided to New Jersey for the ARC project so that those funds can be made available to other communities for public-transit projects. This amount also recovers approximately 50% of the funds provided to New Jersey under the American Recovery and Reinvestment Act, and this money will be returned to the U.S. Treasury.

In addition to the cash payment amount, New Jersey will be required under the terms of the settlement agreement to spend more than $128 million in CMAQ program funds on transit-related projects that have been reviewed and approved by the U.S. DOT.

“We appreciate the support and encouragement of Senators Lautenberg and Menendez in reaching an agreement that is good for the taxpayers of New Jersey, but also helps to improve infrastructure in the state,” LaHood said. “I thank the governor and his legal team for reaching this agreement.”

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