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New Jersey Republican Gov. Chris Christie had the power to kill the Hudson River rail tunnel or improve it. Today, for the second time, he killed it, saying, “I cannot place upon the citizens of the state of New Jersey an open-ended letter of credit.”

Lost in the controversy about Christie’s blunt style or national political ambitions, which drew a lengthy story in yesterday’s Wall Street Journal, is the fact that Christie’s own state agency, run by his own political appointee, is the prime reason why the project faces the reported runaway costs that the governor says the state can’t afford.

Originally, the trans-Hudson tubes were aligned to connect in Manhattan with Amtrak’s rebuilt Penn (Moynihan) Station, with a future connection to Grand Central Terminal on Manhattan’s East Side.

This plan was to connect trains using the new tunnel to Amtrak’s Northeast Corridor, as well as to rail lines spreading to Long Island, upstate New York, New England, and eastern Canada.

Instead, New Jersey Transit opted, mostly for parochial reasons, to abandon the Penn Station alignment in favor of a dead-end terminal under 34th Street usable only by NJT.

This decision was made under the administration of Democratic Gov. Jon Corzine. Christie defeated Corzine last November and appointed a new executive director for NJT, James Weinstein. It was Weinstein who Christie turned to in September to chair a committee whose three-page memo the governor subsequently used as the rationale for his decision to terminate the tunnel— a memo that never brought up the obvious design flaws of the dead-end plan or even addressed the potential cost overruns of the current project in any detailed way.

Among the co-signers of the memo was Bill Baroni, a prominent New Jersey Republican who Christie appointed as deputy executive director of the Port Authority of New York and New Jersey last February.

The Port Authority had pledged $3 billion to the Hudson tunnel, but now seems very happy to use the money for road purposes. In an interview earlier this year, Baroni cited two New Jersey projects, expanding the Goethals Bridge, and raising the Bayonne Bridge by 65 feet to allow larger ships to enter Newark harbor, as high-priority items for the port authority.

In trying to salvage the tunnel project during a two-week reprieve granted by Christie, federal officials reportedly offered several options to the state. They included one that eliminated the state’s risk of cost overruns.

But Weinstein, who acted as Christie’s representative in the talks, said the state wanted more hard cash than the $3 billion already pledged by the Federal Transit Administration.

It’s widely known that the transit agency has no ready funds because Congress has delayed passage of a new surface transportation authorization bill.

So as it stands today, the country’s largest rail infrastructure project will stay sealed at the whim of a single governor relying on a few hundred words of vague analysis by handpicked cronies.

For more details, see “A Tale of Two Tunnels.”