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NEWARK-New Jersey Transit’s Access to the Region’s Core (ARC) project aims to revamp the tri-state area’s commuter rail system, and the centerpiece Mass Transit Tunnel project has taken a major step forward. The Federal Transit Administration has issued a “record of decision” for the $8.7-billion tunnel, signaling that it has cleared the final environmental review process.

The agency’s approval also paves the way for as much as $3 billion in federal aid to get the tunnel done, a sum that is still being negotiated. The local $5.7-billion share of the total cost has already been lined up, including $3 billion from the Port Authority of NY/NJ and the rest from the state via NJ Transit.

“Our customers are eager for us to get started because they understand the impact of this project,” says NJ Transit executive director Richard Sarles, who projects a late-2009 construction start and a 2017 completion. “More than doubling train capacity to and from New York in peak periods translates into time savings, better service reliability, more travel options and convenience.”

“We welcome FTA’s action,” says Gov. Jon Corzine, in a statement. “By putting boots on the pavement and shovels in the dirt, this project will employ thousands and help jumpstart the economy in the present, and will pay dividends toward regional economic growth for decades to come.”

MTT will consist of two single-track tunnels that will roughly parallel the existing, 100-year-old, two-track tunnel under the Hudson River. By the numbers, the current capacity of 23 trains per hour would be more than doubled to 48 and the current load of about 170,000 passengers daily would be increased to more than 250,000 trips each workday. NJ Transit officials estimate that the increased rail capacity will eventually eliminate 22,000 automobile trips daily.

In terms of employment, the MTT project is expected to create between 40,000 and 50,000 construction and related jobs between now and the anticipated 2017 completion date. NJ Transit officials also estimate that it will result in 44,000 permanent jobs once the tunnel is in service, and construction itself is projected to generate $4 billion in new personal income and $10 billion in gross regional product.

Plans call for the terminus of the tunnel to link directly with the New York subway system and PATH trains. New York’s Penn Station would also be expanded underground to handle the increased ridership. A lot of train-changing would be eliminated under NJ Transit’s regional plan: Seven rail lines currently requiring riders to change trains to get back and forth to their jobs would be turned into one-seat commutes.

“About $600 million in design and construction contracts will be ready for bidding as soon as a federal funding agreement is reached,” says an NJ Transit spokesman. “Several other contracts and other work totaling about $3 billion will be ready to go to construction soon after.”

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