DOT, New Jersey settle on unspent funds for tunnel project

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Updated Oct 3, 2011

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

The $95 million settlement will permit 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 about 50 percent 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 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,” says U.S. Transportation Secretary Ray LaHood. “I thank the governor and his legal team for reaching this agreement.”