Gov Chris Christie of NJ announced today that he’s stopping work and canceling the proposed $8.7 Billion Trans-Hudson Tunnel project. The tunnel would have doubled commuter train capacity from NJ to Manhattan. The New Jersey Transit, the Port Authority and the Federal Transportation Authority all worked together to agree on the $8.7 Billion budget, as reported by ENR.

Rumors of likely cost overruns inspired Gov Christie to stop work on 9/10/10 on the early stages of the project. A 30 day period of cost evaluation began, even though several hundred million dollars of construction had already been awarded and started. Nearing the end of that 30 day period, the project seems likely to cost between $11 Billion and $14 Billion. Gov Christie made the difficult, but responsible, decision to cut the losses and cancel the project.

How can our industry be so poor at projecting project costs? Inflation can’t be the culprit this time. The bidding market couldn’t be more competitive. The usual suspects for missed budgets don’t seem to be in play. So how can the budget be almost half? Did they take-off the one wall and floor and forget to multiply by two?

As an industry, and as a society, we need to change our systems to obtain reasonably accurate cost projections. It’s time to scrap the design-bid approach to public projects. Any thoughts?