Top federal officials predicted upwards of a year’s worth of groundbreakings for major transportation projects across New Jersey if President Joe Biden is able to sign a $1.2 trillion infrastructure package moving through Congress. U.S. Rep. Tom Malinowski, who represents commuter-heavy Westfield where Transportation Secretary Pete Buttigieg visited on Aug. 9, said the plan would represent the largest infrastructure expenditure since the Interstate Highway System under the Eisenhower Administration in 1956. “I understand riding trains takes longer than it should, not because of New Jersey Transit, but because the work we should have done as a country didn’t happen,” Buttigieg said during his visit.
New Jersey supporters say it could bring billions of dollars for the state’s crumbling roads, bridges, rails and tunnels, which have languished for years. Proposals like the Gateway Development project, which includes plans for two new tunnels under the Hudson River, are widely regarded as among the most significant infrastructure projects of the 21st century. And they’ve gained considerable with support from Biden and the New York and New Jersey congressional delegations. The current tunnels are more than a century old and in dire need of repair.
Under the plan, the state could get $6.8 billion in federal highway aid, $1.1 billion for work on its bridges and $4.1 billion for public transit over five years. That’s on top of the $66 billion slated for Amtrak, including $30 billion toward the Northeast Corridor – a rail line running from Washington, D.C. to Boston, and among the most heavily traveled routes in the world.
Amtrak would also get $11 billion that it can use for capital improvement grants – all potential funding for the tunnel.
Under the existing plans, New Jersey and New York would split the local costs, while Amtrak would take on the remaining half for Gateway, which also includes major overhauls across New York City. Efforts to replace and rehabilitate the existing structures stalled under the Trump administration.
The project wish list ranges from a $10 billion renovation to the decrepit Port Authority Bus Terminal, to an annex building at Penn Station New York that could create the long-sought one-seat rides for many parts of New Jersey. But many of those on the transportation side contend that such a historic infusion of cash into the nation’s infrastructure, long-criticized for under-investment and falling short of other nations’ roads, bridges and railways, means public leaders need to take a hard look at how citizens get around. “There’s an opportunity to look at, can we make more use of procedures like design-build,” said Chris Jones, a senior research fellow at the nonprofit Regional Plan Association, a think tank that focuses on transportation in the New York City region.
Years of delays, wild cost overruns and outright refusal to embark on certain ambitious projects have plagued New Jersey, the region and the nation for years. According to the nonprofit Transit Costs Project, the United States is the world’s sixth-most expensive nation for the construction of urban rail transit. The New York City Second Avenue Subway is costing a whopping $2.6 billion per mile, while San Francisco’s Central Subway costs $900 million per mile and Los Angeles’ Purple Line costs $800 million per mile, according to a recent report by The Eno Center for Transportation.
By comparison, a mile of rail cost $323 million in Copenhagen, and between $160 million and $320 million per mile both for Paris and Madrid. “If you stayed on the European continent … they just made it very easy to travel by train. Culturally, we have a little bit of a difference here, particularly in this area, where we’re completely married to our cars,” said Greg Lalevee, business manager for the International Union of Operating Engineers Local 825, which counts as members more than 7,500 heavy equipment operators.
A joint study between Brown University and the Federal Reserve Bank of New York found that the cost to construct a “lane mile of interstate increased five-fold” between 1990 and 2008. Elsewhere, George Washington University economist Leah Brooks found that in the 1980s, states spent three times as much as they did in the 1960s on interstate construction.
The average project cost per lane-mile for New Jersey’s roads was $191,175, “which is in line with costs estimated in other states,” according to a joint 2019 study by the Federal Highway Administration, the New Jersey Department of Transportation, and the Alan M. Voorhees Transportation Center at Rutgers University.
New Jersey lands in the middle of the pack on infrastructure. The American Society of Civil Engineers gave the Garden State a “C-” in its 2021 report card, same grade as the nation that year. The report found that 37% of New Jersey roads were in poor condition, costing motorists $713 a year, while 7.8% of the state’s bridges were rated as structurally deficient in 2019.
That’s compared to 40% of the nation’s roads in “poor or mediocre condition,” according to the ASCE’s 2021 report, 27% of New York and Pennsylvania’s roads, 16% of Delaware’s roads and 34% of Connecticut’s roads. Each of these states scored a C-.
The American Road and Transportation Builders Association ranked New Jersey 22nd in terms of the percentage of structurally deficient bridges, compared to West Virginia, which topped the list, and 27th in the raw number of such bridges, compared to No. 1 one ranked Iowa.
A lot of work
Repairs of the existing Hudson River tunnel will cost about $1.9 billion, while the addition of the two new tubs will cost nearly $10 billion. Construction of the Portal North Bridge, which would replace the swing draw bridge just south of the tunnel entrance along the NEC, would cost an estimated $1.5 billion.
New Jersey Transit has a $17 billion capital plan for overhauling its systems over the next five years, but roughly $5.7 billion of those projects lack funding. The plan includes the proposed 18-mile Glassboro-Camden Light Rail in South Jersey with a $1.7 billion price tag, electrification of NJ Transit’s 3,000 buses by 2040 and an extension of the Hudson-Bergen Light Rail in Bergen and Passaic counties.
“The concern about being able to manage the costs of large projects is a reason why a lot of projects have not advanced. It’s an obstacle we need to overcome,” said Anthony Coscia, Amtrak’s chairman and a partner at the law firm at Windels Marx Lane & Mittendorf. “Ever since the Big Dig, there’s been a reluctance to take on big projects because of the political exposures of cost overruns.”
The Big Dig tunnel project in Boston dragged on for two decades and cost more than $24 billion, becoming the poster child of cost overruns for public works projects. “I don’t think that the fear of being able to manage them efficiently should be a reason why we don’t build the things that are absolutely necessary from an economic and social standpoint,” Coscia maintained.
Eric Goldwyn, a transportation professor and transit researcher at New York University, and leader for the Transit Costs Protect, contends that if Gateway’s financing is in place, “it can allow and open up the opportunity to just really focus on ‘OK let’s get this project … as good a condition as it can be,” and in a way otherwise not possible without that financial security for the project.
Many economists and public officials agree that the project would yield enormous economic benefit for the state. “This is firmly about investing our money in revitalizing our communities that we have talked ad nauseam about … racial equity and inclusion,” Makada Henry-Nickie, a governance fellow at the center-left Brookings Institution, said in April. “When the rubber hits the road, this is a down payment. This is the kind of scale of the investment it takes.”
Why so expensive?
In terms of what eats up the money – labor costs, unions, red tape and lawsuits, permitting, material – it’s “death by a thousand paper cuts,” Goldwyn added.
Most experts NJBIZ interviewed for this story agreed on that there was no one source of cost overruns and project delays. Still, a few themes emerged, some specific to the Garden State.
“We tend to build these projects in what are built environments,” Coscia said. “It’s not like we get to stop everything and bring in the construction crews … You drive on New Jersey’s highways, you happen to be out late … all of a sudden you realize that three lanes on the Garden State Parkway have become one. That’s because you can only have those projects in the middle of the night.” And that’s much more expensive than bringing a crew out to work during the daytime hours.
“We work in a very confined, crowded state. We’re the most congested state in the country,” New Jersey Transportation Commissioner Diane Gutierrez-Scaccetti said in a phone interview. As an example, she cited the $94 million replacement of the nine-line Route 495 bridge, often regarded as one of the most heavily congested stretches of road in the nation as it carries tens of thousands of bus and car commutes over Routes 1 and 9 and into the Lincoln Tunnel each day. Starting in August 2018, two lanes of service had to be taken off at a time to get the work done.
“I don’t know if we’ve ever done a study on the average time of a project from start to finish,” Gutierrez-Scaccetti said.
Jones suggested that agencies in crowded environments often clash against each other, having their own conflicting interests. “For Amtrak and NJ Transit and [the Metropolitan Transportation Authority], a big one is how the agencies coordinate among themselves,” he explained. “So one of the big reasons why the East Side Access project was so expensive is because Amtrak and the MTA and NJ Transit had to really battle over how the interlocking in Queens … was reconstructed because all their trains pass through and everyone wanted to have priority for their own service. Everyone had their own set of rules for their labor force.”
And many public agencies have their hand out, Goldwyn said. For example, a utility project unrelated to the existing roadwork might get tacked onto that project. “In Boston, we look at the Green Line extension, replacing old sewer lines that … this city had the estimated cost just to redo their sewers was $5 billion, and they got a portion of the underground system totally replaced brand new with this mass transit project and that has nothing to do with the transit project,” he explained.
“Everyone is vying for a carve-out in the project for themselves so they can enhance it for them.”
Can costs be cut?
Lalevee suggested that scores of projects had advanced significantly during the pandemic, which kept millions of travelers home-bound, meaning a “lower traffic flow” and more flexibility to get work done.
Many delays, he said, “simply come down to project execution.” Material shortages have not helped, especially as the global supply chain struggles to rebound from the COVID-19 recession. “There’s a lot of raw materials we can’t get our hands on right now,” Lalevee continued. “It’s very easy to blame the workman. When the material costs are skyrocketing and the labor price has been stagnant, I reject the argument.”
Many public figures – like Coscia and Gutierrez-Scaccetti – said they are confident that they’ve set up their own organizations efficiently enough to keep costs down, especially on the mammoth Gateway tunnel. “We expect to be able to build that project through a combination of both internal resources and external sources, meaning engagement with the private sector … both manage risk and also shifts risk so that we can make assurance to people that we don’t have wild cost overruns,” Coscia said.
But the huge price tag shouldn’t come as a surprise, suggested the state’s transportation commissioner. “You’re building a new tunnel, under the river, what would puzzle you about the costs?” Gutierrez-Scaccetti said.
And necessary public input takes time and money, Coscia said. “The time of Robert Moses just deciding to build something and going ahead and doing it, with little to no input, that time is gone,” Coscia said. “We have in its place a more inclusive process, which some people view as adding cost and time and delay.”