Hudson River NJ-NY Rail Tunnel Faces New Halt Without Federal Funds

Construction on the planned $16 billion rail tunnel under the Hudson River could halt again within two to three months unless federal funding resumes, the project’s developer warned last week, according to Bloomberg.

The project, led by the Gateway Development Commission, would build a new rail tunnel linking New Jersey and Manhattan for Amtrak and New Jersey Transit trains. It would also allow rehabilitation of the existing tunnel, which opened in 1910 and is in urgent need of repairs. Gateway says the broader project would expand rail capacity between the two states and generate about $19.6 billion in economic activity.

Funding for the project has been in dispute for months. The US Department of Transportation has withheld funds since October, prompting Gateway to sue last month to force the release of the money. New York and New Jersey filed a similar lawsuit.

Bloomberg writes that some payments resumed after a federal judge ordered the Trump administration to release reimbursement funds the agency had requested. Since the ruling last month, Gateway has received about $254 million. The federal government had suspended payments while reviewing whether the project complied with a new administration policy banning contracting requirements tied to race or gender.

Still, Gateway officials say the funding interruptions threaten construction progress. A previous stoppage between Feb. 6 and Feb. 22 temporarily laid off about 1,000 construction workers and added “million of dollars in additional costs,” Gateway chief financial officer Pat McCoy said in a court filing.

“We will have no choice but to stop work again if the federal government does not continue to disburse the funds that are committed to the project,” Gateway Chief Executive Officer Tom Prendergast said in a statement Tuesday. “This project is too important to delay. That’s why we’re doing everything possible to regain consistent and predictable access to all our federal funding so we can keep our workers on the job and deliver the reliable, modern rail transit Americans deserve.”

Congress has already approved funding for the project, including $11 billion in federal support and $4 billion in loans to be repaid by New York, New Jersey and the Port Authority of New York and New Jersey. Amtrak is expected to contribute another $1 billion.