Via Andrea Bernstein at Transportation Nation:

Three sources familiar with the $8.7 billion tunnel under the Hudson river from NJ, say, barring an unexpected, last-minute change of heart from Governor Chris Christie, the ARC transit tunnel under the Hudson river is dead. The sources say Christie will likely announce this week that he’s restructuring NJ’s portion of the money to go to roads. The FTA and the Port Authority will recoup their $3 billion each, though the Port’s money will likely go into other regional projects.

The writing had been on the wall for this project since September 13 when New Jersey Gov. Chris Christie suspended work on it to “review costs.” The state’s leaders feared that the $8.7-billion price tag was too conservative and that the state would be forced to pony up money it didn’t have. At one point, Christie claimed that the project could cost $5 billion more than expected.

On September 16, as activists urged Christie to resume work on the project, I explored the governor’s wavering commitment to the much-needed transit project, and by September 21, it seemed clear that New Jersey would takes its tunnel investment and siphon it into its transit fund with a heavy emphasis on road spending. That’s exactly what appears to be happening.

As recently as yesterday, New Jersey officials confirmed that the ARC Tunnel money could go into New Jersey’s empty transportation coffers. “I don’t know,” Jim Simpson, Christie’s transportation commissioner, said in response to questions of the funds’ future, “but let’s look at the source of the money. You’ve got a billion dollars of federal money that comes to the New Jersey Department of Transportation that would normally be associated with highway projects. You’ve got that billion coming in—100 million a year—that is rededicated, flexed to ARC. So if ARC didn’t happen there’s a billion dollars for roads and bridges and things like that.”

The ARC money will most likely be funneled into New Jersey’s near-empty Transportation Trust Fund. While some of the money will go to rail — the past breakdown is available here — any New Jersey transit upgrades will pale in comparison with the potential future benefits to the region and state from the ARC Tunnel.

And so, there appears to be no future for this project. Michael Bloomberg said that, as this project has long been New Jersey’s baby, the city will not step in to fill the funding void. The Port Authority has expressed its support, but without New Jersey’s $3 billion contribution, the PA doesn’t have the money to keep it going. The Port Authority has not yet said how it will deploy the money it had committed to the ARC project.

While Transportation Nation called this a huge blow to a transit-oriented Obama Administration, the impact of this decision wille extend well beyond Washington. Despite the project’s flaws, the region needs to increase its rail capacity into and out of Manhattan. With Christie’s decision, the Trans-Hudson Express Tunnel will remain but a dream on paper, and the Access to the Region’s Core will not be improved. What a shame.