Feds: NJ Must Repay $271M For Scrapped Trans-Hudson Rail Tunnel

TRENTON, N.J. (AP) -- The Federal Transit Administration has determined that New Jersey must repay the federal government the entire $271 million it spent on early design and engineering work for a New Jersey-New York train tunnel that Gov. Chris Christie scrapped.

U.S. Transportation Secretary Ray LaHood announced the decision Friday in a letter to New Jersey's congressional delegation and in a 52-page report sent to the Christie administration from the FTA's Budget and Policy office. The Associated Press obtained copies of both documents.

Christie abandoned the project over what he said were escalating costs.

In the letter, LaHood calls Christie's decision to cancel the tunnel unfortunate. He says Christie and leaders at the state's mass transit agency willfully broke the contract for the tunnel.

LaHood says the cost range was known since 2008.

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