Gov. Christie of NJ recently cancelled the proposed $8.7B Hudson River rail tunnel from Northern NJ to Manhattan. Knowing that hundreds of millions and five years had already been invested in this project, I initially wondered if the cancellation was prudent. Gov. Christie stated that the likelihood of substantial cost over-runs, including the $1B overage already projected, made cancellation necessary.

As the records of current costs get examined, Gov. Christie’s decision looks prescient. The real estate costs for required properties and easements seemed to be spinning out of control. 172 properties or easements needed acquired and only 13 had been completed. The cost for those 13 properties was $28M.

It’s difficult to determine if that’s too high a price, but it’s clear that the state spent $12M on fees and expenses to obtain those 13 properties. That’s ridiculous. Imagine buying an industrial property for $10,000,000 and being told your attorney and engineer had spent $4,280,000 on fees. They’d have some explaining to do.

It appears the lack of clear guidelines made this project likely to become a boondoggle. The fact that one attorney booked 88 hours (at $200/hour) in September after the project was almost certainly getting shut down further shows the poor management of the process.

Gov. Christie saw it walking like a duck, quacking like a duck and swimming like a duck and concluded, it was most likely a duck. I applaud him for a good decision, but understand our industry needs to do better. We need to develop project management strategies that work in these complex times. We must get back to the basics of managing the cost, schedule and performance from the project start to the end.