N.J. Turnpike negotiates paying $81M a year for new rail tunnel loan

N.J. Turnpike negotiates paying $81M a year for new rail tunnel loan
Written by Publishing Team

Treasury officials in the New Jersey Turnpike are negotiating details of a plan to have the Road Authority repay $81 million annually in loans to fund the state’s stake in the Gateway Tunnel project.

Turnpike commissioners agreed an agreement to begin those negotiations last month. Under a larger funding plan for a $11.6 billion project to build two new tunnels and rehabilitate existing 111-year-old tunnels, the state will use a federal rail infrastructure loan to get its share of the project.

If details are worked out, payments will start approximately 10 years after construction begins on the project, according to the agreement. The exact date for how long the authority will make payments has not been set.

“There is a lot more jargon involved in the call negotiations than just the dollar number,” said Tom Finney, a spokesperson for Turnpike Authority. “All these other terms are what remains to be negotiated.”

He said payments for the Gateway Tunnel loan will be made after the authority fulfills its regular bond payments.

why now?

The loan repayment agreement is a component of the Federal Rail Infrastructure loan application, which is expected to be submitted in the coming months, Stephen Sigmund, a spokesperson for Gateway Development Corporation, said. GDC is the agency set up by New Jersey and New York to transfer the project and apply for grants and other funding.

“This further demonstrates the enhanced financial commitments of our state partners to the Hudson Tunnel Project, and is an important part of the move toward a full grant funding agreement,” he said.

In November, Gateway officials said they hoped federal funding would be available by the end of 2022, with construction likely to begin in the summer of 2023. Construction of new tunnels and rehabilitation of existing tunnels is expected to be completed in 2035, Gateway officials said.

Last May, a project to augment and rehabilitate the 110-year-old tunnels with two new tunnels received long-awaited environmental approval that will move New York and New Jersey one step toward their construction after three years behind schedule. 2018 date.

The December negotiation agreement outlines some of the reasons Turnpike officials are willing to pay for a new train tunnel.

“The turnstile recognizes that the integrated transportation system of New Jersey depends on the functional and efficient operation of all components of that system, including the passenger rail transportation provided by NJ Transit,” Turnpike Authority Executive Director John Keeler said in the document.

He said delays and suspensions of rail service between New Jersey and New York when there is a problem with existing tunnels are having a negative impact on Turnpike.

“Inefficient and unreliable rail service along the Northeast Corridor adversely affects the routes of the authority, specifically Turnpike, which becomes an alternative travel route for members of the public who may use the commuter rail service,” Keeler wrote. “Increasing the efficiency and capacity of the passenger rail service along the NEC benefits the authority by easing vehicular traffic and reducing congestion on the roads.”

But not everyone buys this interpretation.

“The old, tired Keeler metaphor has been imposed on the public for decades to justify paying motorists for inefficient and unreliable rail service,” said Steve Carillas, director of policy for the National Motorists Association of New Jersey. “This claim is rarely true and is not supported by actual supporting data.”

He added that the 15X exit to Secaucus Junction railway station still involved the same Turnpike trip as if someone had driven into New York City.

Can they bear it? The agency’s revenue was 5.3%, or $104.8 million, above the $2.07 billion of total revenue projected in the 2021 budget, according to the agency’s financial reports as of November 2021. For the first eleven months of the year. Turnpike and Parkway each generated $1.8 billion in fee revenue.

The budget is to fund the agency’s $24 billion 10-year capital plan. Fees rose 3% on Jan. 1, driven by a financial benchmark.

Carillas criticized the concept for being an example of government and rulers bypassing at the expense of fee-payers.

“The bipartisan governors raided the authorities in order to get the transfer money so they wouldn’t have to take it out of the public fund and (annoy) another group of voters,” he said. “Christie did this with the Port Authority’s ARC Tunnel money, and she used it to rebuild the Pulaski Skyway, build a new bridge on Route 7 Wittpenn and rehabilitate Route 139. Murphy does this with NJ Transit and Gateway. The remedy is to reduce the Viceroy’s control over the authorities.”

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Larry Higgs can be reached at

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