ARC Tunnel: NJ's Legal Fees and Interest Mounting

The cost of New Jersey’s fight with the federal government over a bill for the canceled trans-Hudson tunnel project is mounting

The US Department of Transportation wants NJ Transit to return $271 million it gave the state for the ARC tunnel.

The digging had been underway for a year when Governor Christie killed the project last autumn out of what he said were concerns about potential cost overruns. When the Federal Transit Administration sent a bill, NJ Transit hired a DC law firm.

So far, New Jersey has spent about a million dollars in legal fees on the battle. Officials said the state doesn't have a set limit on legal costs. Meanwhile, interest on the $271 million debt -- which the feds say the state is also responsible for --  is accruing at 1%, or about $225,000 a month.

NJ Transit spokesman Paul Wyckoff said that “talks between parties are continuing.” He added: “Hundreds of millions of dollars are at stake, and taxpayers deserve the very best effort we can provide them.”

The US DOT said that there was no new update, and Governor Christie's office did not respond to requests for comments.