New Jersey Gov. Christopher Christie’s Oct. 27 decision to spike a major new commuter rail tunnel under the Hudson River, which was set to be the largest U.S. public-works project, is causing ripple effects across the region and the country. Industry proponents are hoping for stronger support for similar but still-viable projects from Congress and from U.S. employers.

Backers of the New Jersey rail link, called Access to the Region’s Core, could not secure Christie’s support because he feared the state would be on the hook for cost overruns some said would boost the project price to as much as $13.7 billion from an estimated $8.7 billion. Christie emphasized his objection to costs not covered by $6 billion in funds from the Federal Transit Administration and the Port Authority of New York and New Jersey, despite mediation by Transportation Secretary Ray LaHood.

A U.S. DOT official says, “[FTA] has made no decisions yet on how to reallocate the funding allocated to ARC.” The official, who requested not to be named, claims New Jersey will owe the federal government up to $350 million and the $3 billion in New Starts program funding that had been allocated to ARC will need to be designated for other eligible projects in the pipeline.

CHRISTIE

As ARC project firms received official notice of the project’s cancellation and began demobilization, executives on and off the project took the news hard. “This is a tremendous blow to tunnelers in New York City,” said one official of a design firm bidding for a future segment contract who declined to be named. “I think international contractors probably have a sour taste in their mouths after putting in so much effort. “ He says the cancellation may alleviate possible labor shortage concerns on other area projects, but “there isn’t really much out there.”

The executive claims that, despite the project’s physical constraints and worksite restrictions, such as no nighttime activity, “the likelihood of cost increases was less than for [Boston’s] Big Dig. Bids were all below estimate. It was an opportune time to build something reasonably economically. I think it’s a real missed opportunity.”

One transportation firm executive, speaking at a recent conference, noted the need for more support for future public works from the U.S. business community. “There must be employers lobbying, not just engineering firms and the [American Road and Transportation Builders Association],” says Robert Stromsted, CEO of HNTB Corp., Kansas City. “We need more Silicon Valley CEOs.”