Port Authority Cross Harbor Freight Plan Needs Financial Clarity: Fitch

A Cross Harbor Freight Movement Project proposal from the Port Authority of New York and New Jersey would be a positive for the regional economy, but more clarity is needed on how the initiative would be financed, according to a new Fitch Ratings report released Monday.

The Port Authority along with the Federal Highway Administration released a draft environmental report last month that includes options for transporting rail cars and trucks across the Hudson River by a new tunnel or ferries with estimated project costs ranging from $100 million to $11 billion. Fitch notes that while the Port Authority has produced "consistently healthy financial performance", the agency's spending flexibility is pressured due to investments in the World Trade Center and other projects related to "aging assets."

Toll increases would be one way of creating new revenue to help fund the CHFMP project, but this strategy may be challenged by already high rates for trucks and cars, according to Fitch. New toll increases went into effect on Dec. 7 bringing the highest rates to $102 for trucks and $13 for cars.

"We expect this and the other toll increases to limit traffic growth," Fitch analysts said in the report. "Further, repeated increases would eventually constrain traffic and cause a decline in interstate commerce that could have a negative impact on funding and the regional economy."

The Port Authority outlines in its CHFMP draft study report on Nov. 13 on how each of the alternatives being considered could generate revenues from user fees, tolls or charging to move each railcar and container.