The Record: Feds say Christie knew of risk on tunnel

From today's NJ Record:

The feds say NJ Governor Christie was aware his predecessor, Jon Corzine, had signed an  "Early System Work Agreement" to get federal funds to NJ quickly for the ARC Tunnel project -- and that such an agreement meant money would have to be returned if the project wasn't built.

Christie reaffirmed New Jersey's commitment to the project in an April 8 letter to U.S. Transportation Secretary Ray LaHood that called the tunnel "critical for the transit riders of New Jersey and the region."

"Given the time constraints of current contractor bids, I look forward to an expeditious award of the second Early System Work Agreement," Christie wrote. Six days later, FTA notified NJ Transit the agreement was granted, allowing for contracts to go forward on parts of the project in North Bergen and Kearny, according to documents released Thursday by the USDOT.

More from the story:

"The federal statute covering Early System Work Agreements says that if an applicant does not build a project "for reasons within the control of the applicant, the applicant shall repay all government payments made under the work agreement plus reasonable interest and penalty charges."

"Early System Work Agreements are rare. Just five, including the one with NJ Transit, have been used since the FTA's New Starts program to expand mass transit began more than 30 years ago. Most major transit projects are built under what's known as a Full Funding Grant Agreement, which is very time-consuming to conclude.

"The ESWA process is used in projects such as the tunnel where all the parties have put their money up and they want to get started because waiting for a full agreement could drive up the cost of the project.

"None of the four other projects using this process ended in default. Three of them - in New Orleans, Seattle and Salt Lake City - were completed. Work continues on the fourth, the Second Avenue Subway line in New York City."