Gateway head Zaro explains why he’s still confident tunnels will be built despite latest setback

By Tom Bergeron
North Jersey | Mar 18, 2019 at 6:55 am
Q&A

The federal government is expected to give low ratings to both the new Hudson River tunnels and a new Portal Bridge on Monday, in response to the request to spend federal dollars funding the so-called Gateway Tunnel project.

The ratings, unofficially released Friday, put both projects at “medium-low,” essentially 2s on a 1 to 5 scale judging projects on their necessity and the ability to find financing to complete them.

Some said it was a tough blow for the projects — which are estimated to cost approximately $13 billion in total.

But Jerry Zaro, chairman of the Gateway Program Development Corp., which is overseeing the delivery of the Gateway project, said he remains confident the tunnels and the bridge will get done.

“You can report that I have a lot of optimism,” he told ROI-NJ on Sunday. “This thing is getting built. It’s only a question of, ‘Is it going to be done in a responsible way?’

“Any government that ignores the crying, urgent need of the replacement of this bridge and tunnel is irresponsible.”

Zaro feels the project is being held up more by politics than money.

“If they want to find, ‘Yes,’ they can find, ‘Yes,’” he said. “And if they want to do this, they can do this.

“I am still hopeful that, at the end of the day, reason prevails. Because it usually does.”

Zaro said any other alternative would be a worse outcome.

“Hopefully, it won’t take a calamity, where the rest of the country comes running in with relief money, to get this done,” he said.

“This is really the point. We’re asking for the money for prevention, as opposed to disaster relief. But, one way or the other, it’s going to have to be spent.”

Zaro, a member at Sills Cummis & Gross in Newark, talked on a variety of subjects regarding the process. Here is a question-and-answer portion of the interview, edited for space and clarity.

GDC
The Portal Bridge replacement project is part of the so-called Gateway Tunnel project.

ROI-NJ: Were you surprised when you heard how the projects were rated?

Jerry Zaro: Not at all. They’ve been instructed to say, ‘No,’ and they can’t just say, ‘No.’ They have to cloak it in some authentic-sounding language. But this is not authentic.

Anybody looking at the service records of these two facilities and the delays that are costing tens of millions of dollars would find it impossible to characterize them as ‘low’ or ‘moderate.’ And, by the way, just two years ago, the same (U.S. Department of Transportation) ranked us ‘High.’ What happened? Things got better?

I don’t understand why they would so vehemently attach their name to a potential failure.

If there is a disaster, it will bring the regional economy to its knees and greatly impact the national economy and they are every which way on record as saying they don’t want to build these new projects.

ROI: Talk about the local funding — because that appears to be a key part of why the feds are holding back aid.

JZ: On the Hudson tunnel, they said they recognize the Port Authority’s commitment for $2.7 billion, but they were unsure of the other local commitments. Well, the $2.7 billion commitment from the port is more than the 30 percent that is required as a local share. So, that, in and of itself, is bogus.

And (Gov. Phil Murphy) put up the $600 million on the Portal North Bridge. Again, that alone is over the 30 percent threshold.

ROI: Talk about what the GDC is doing to help the project move forward?

JZ: We continue to do everything that we have been doing, which is to staff up, which is to continue to seek value from money in the engineering process to reduce the contingencies, and to show that the project can be brought in, hopefully, at numbers lower than what the public has seen before by going through a procurement process.

Remember, these estimates are by our engineers and by our staff. Now, we’re going to bring in the private sector.

ROI: What are you doing to convince the private sector to get in on the project?

JZ: We’ve created a vast data room with information going back to the construction of these facilities in 1910. We’re doing geotechnical borings under the Hudson and we’re publishing that to eliminate uncertainty.

When you’re drilling a tunnel, who knows what you’re going to find? By doing these borings and publishing the results, the bidders will now know more about what they will have to face.

There will be less guesswork and more fact. That will reduce the contingencies built into the budget, which will reduce the budget.

ROI: We know you are working with the local federal politicians, including New Jersey Sens. Bob Menendez and Cory Booker and New York Sens. Chuck Schumer and Kristen Gillibrand. How is that going?

JZ: Last week, I met with Sens. Schumer, Gillibrand, Booker and Menendez and we had a very productive meeting. We’re going to continue to meet with them and search for solutions.

The president isn’t wrong when he says these projects, when done by the government, are very expensive. That’s why we’re doing the value engineering, so we can say we’re responsive to it. That we are bringing down the cost.

We’re not dug in, either. We’re looking at other means, other alternatives, other options, other ways we can enhance the process.

ROI: Final thoughts?

JZ: This is an evolution. We’re coming into a federal budget season. I have to believe that they’ll be some horse trading, and we hope we’re one of the horses.