MANHATTAN (CN) — With New York's plan for a freight rail tunnel across the Hudson stalled for more than a decade, a group behind the troubled project claims that the Port Authority now owes it more than $446,000 in public money.
The Department of Transportation's most recent report estimates that nearly 40 percent of all freight travel across the United States moves through the railway system, far exceeding that shipped via water, pipeline, trucks or air.
New York City and its suburbs east of the Hudson River, on the other hand, rely largely on trucks since only 1.8 percent of its freight arrives by rail, Crain's reported.
Riddled with complaints of truck-related pollution, congestion and road safety, the city commissioned a study in 2003 to build a freight tunnel extending the national rail system east of the Hudson River.
At the time, a group called the East of Hudson Rail Freight Task Force — originally co-chaired by U.S. Reps. Jerrold Nadler, D-Manhattan, and Christopher Shays, R-Connecticut — had recently formed to address these problems.
The task force, which sprang into existence shortly after the breakup of the Conrail transportation giant, obtained more than $357,000 in federal funds to be matched by local funds of funds of more than $89,000.
In a lawsuit filed on Friday, the task force claims that the Port Authority of New York and New Jersey became the trustee for that money and refused to transfer it to the group as it racked up debts.
"On Aug. 13, 2015, the plaintiff, finding itself insolvent, sent a letter to the defendant's executive director demanding that the Port Authority make the first earmark funds available to discharge the plaintiff's debts," the 14-page complaint states.
The task force's lawyer John McHugh, who filed the lawsuit, blamed the Port Authority for the group's decline in a phone interview.
McHugh credited the task force with helping fix a portion of the Hell Gate Bridge to Queens, allowing 286,000-pound trains to travel as far east as Riverhead, Long Island, and facilitating aid after Hurricane Sandy.
McHugh said that after the Port Authority took over the cross-island railroad project, "they proved that they were completely incompetent."
Part of the reason for that, McHugh said, was the organization's institutional secrecy.
"The Port Authority doesn't like to be criticized, even behind closed doors," he said.
Giving an example of one argument, McHugh said that the agency left 42 rail cars of beer in a Brooklyn yard in the middle of the summer for a week because of a dispute over who was responsible for fixing a bad track.
"To deny the good citizens of Brooklyn beer for a week is to risk starting a revolution," McHugh quipped.
According to the lawsuit, an unnamed Port Authority executive threatened to torpedo a study into the Cross-Harbor Freight Program unless Nadler tamped down criticism of the agency.
"It is understood that as Congressman Nadler sought approval of the construction of the rail freight tunnel across the upper bay, and the defendant was conducting the study of that project to determine if it was feasible and justified, the defendant informed Congressman Nadler that if the plaintiff continued to operate and call the defendant's actions into question, the study of the tunnel would be unfavorable," the complaint states. "Thus, the Congressman withdrew from the defendant as its chairman and as a member of its board."
The task force claims that the Port Authority has withheld the funds as "a part of its policy of keeping its activities secret to avoid any oversight."
The Port Authority did not respond to email and telephone requests for comment.
A spokesman for Nadler declined to give any comment, except to note that the task force the congressman sat on has been insolvent for years.
Nadler's spokesman also noted that the congressman recently helped secure a $10.6 million federal grant to the Port Authority for "key elements" of the Cross-Harbor Freight Program, connecting the New York City region to the national freight rail grid.
The expenditure, announced on July 6, is part of the Fixing America's Surface Transportation Act of 2015.
"This grant will help fund important intermodal rail improvements, and advance the cross-harbor project, which is essential for removing trucks off New York and New Jersey's roadways, alleviating the freight bottleneck in our region, and improving air quality and economic growth," Nadler said in a statement at the time.
The grant is a drop in the bucket of the $7.4 billion that the Port Authority estimated a freight tunnel would cost in an environmental impact statement last year.
Although the lawsuit alleges that Nadler left the task force in order to save his rail tunnel dream, a New Jersey outlet quoted the Port Authority's chairman John Degnan expressing doubts that the tunnel ever will be built.
"It's hard for me to imagine, given the competing demands for the federal government fund for other projects, that it — the federal government — would commit to funding at a cost on that order of magnitude," NJ.com quoted Degnan as saying.
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