NJ Gets Extension on $271M Tunnel Tab

Feds offered to credit Jersey half the bill if it pays the whole thing

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    NEWSLETTERS

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    embers of labor unions hold a rally in support of the planned 'Access to the Region's Core' (ARC) rail tunnel between New Jersey and New York City October 19, 2010 in North Bergen, New Jersey. New Jersey Governor Chris Christie plans to kill the project due to budget constraints. (Photo by Ramin Talaie/Getty Images)

    The U.S. Transportation Department has granted New Jersey an extension of just over two weeks on the $271 million it owes for a scrapped rail tunnel project.

    The extension was granted in a letter dated Monday to lawyers for the law firm New Jersey Transit hired to fight the debt. The Associated Press obtained the letter on Tuesday.

    Gov. Chris Christie killed the $8.7 billion tunnel project in October because of possible cost overruns. The federal government then demanded repayment of money already spent on the project.

    Transportation Secretary Ray LaHood said recently that New Jersey would be credited $128 million to use on other projects if it pays the debt in full.

    The law firm now has until Jan. 10 to submit a response.