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New Jersey Owes $271 Million for Tunnel Christie Cut

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Nov. 9 (Bloomberg) -- New Jersey must repay the U.S. government $271 million immediately for money spent on the proposed Hudson River rail tunnel that Governor Chris Christie canceled, a Federal Transit Administration official said.

The state also will owe “reasonable interest and penalty charges that will be determined by FTA,” Brigid Hynes-Cherin, the administration’s regional administrator in New York, wrote in a letter yesterday to James Weinstein, executive director of New Jersey Transit. The state lost its claim on another $79 million earmarked for the project, she said.

“The final amount of funds obligated but not yet expended will be determined through a complete audit of the project,” said the letter, which Bloomberg obtained through two federal government sources who asked for anonymity because it hasn’t been released. “FTA expects the immediate reimbursement of the amounts listed above even while this audit is ongoing.”

New Jersey is taking issue with the bill, said Paul Wyckoff, a New Jersey Transit spokesman.

“We are reviewing the request and are assessing our options,” he said in an e-mail statement this afternoon. “NJ Transit does not agree that the issues are as clear-cut as portrayed in the FTA letter.”

Wyckoff declined to elaborate on the statement when reached by telephone this afternoon.

U.S. Transportation Secretary Ray LaHood said after the cancellation Oct. 27 that New Jersey would have to repay the federal government as much as $350 million for initial work.

Kevin Roberts, a spokesman for Christie, said the request is being evaluated.

The governor stopped work on the proposed 8.8-mile (14 kilometer) rail tunnel, saying New Jersey taxpayers couldn’t afford as much as $5 billion in potential overruns on the $8.7 billion initial price of the project.

To contact the reporter on this story: Dunstan McNichol in Trenton, New Jersey, at dmcnichol@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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