The Gateway Development Commission (GDC) is seeking release of federal funding withheld since October for the Hudson Tunnel Project (HTP), centerpiece of the Gateway Program to increase Amtrak intercity and NJ Transit regional/commuter rail service capacity between New York and New Jersey. On Feb. 6, 2026, HTP construction halted at 5:00 p.m. EST, only to be given a reprieve by a Federal Judge who ordered the funding restored as litigation proceeds.
GDC, which is overseeing the HTP, has filed a lawsuit against the U.S. Department of Transportation (USDOT) seeking release of contractually obligated grant and loan funds for the project. GDC is seeking $205 million in disbursements previously withheld, along with damages that will be incurred because of any suspension of the project or cancellation of existing contracts.
“For more than two years, the hardworking men and women building the Hudson Tunnel Project have not missed a day of work,” GDC CEO Tom Prendergast said. “That will change today, because the federal Administration continues to withhold funding for this vital investment in our nation’s rail infrastructure. After spending more than $1 billion, and countless hours of hard work on this project, we will be left with empty construction sites in New York and New Jersey. Today is a setback, but it is not the end. To those who have long championed the project, our workforce, and the riders who are relying on GDC to finally deliver the modern, reliable commute they deserve: Know that our work is far from over. GDC will continue to do everything in our power to get our funding restored and deliver the most urgent infrastructure project in the country.”
USDOT began withholding federal funding payments for the HTP and Phase 2 of the New York Metropolitan Transportation Authority’s Second Avenue Subway projects in October, stating that the requests for payment could not be processed during a review of the projects that it had ordered. USDOT stated that the review would investigate whether “any unconstitutional practices” are occurring within the projects after thew agency ruled that “race and sex-based presumptions of social and economic disadvantage that violate the U.S. Constitution” should be removed from the Disadvantaged Business Enterprise (DBE) program, which is intended to favor small businesses when awarding contracts for federally funded projects.
The lawsuit filed by GDC argues that USDOT and GDC are legally bound by the terms of Capital Investment Grants (CIG), Federal-State Partnership (FSP) Grant and RAISE Grant agreements, as well as Railroad Rehabilitation and Investment Financing (RRIF) loans, since full HTP funding was secured in July 2024.
The White House has accused Democratic politicians of failing to negotiate with the POTUS 47 Administration to secure a deal for the future of the project.
Funding Exhausted
GDC says it has drawn on available funding and credit to progress the project as planned while the federal disbursements are paused. However, it was confirmed during a Jan. 27 board meeting that all funding would be exhausted by Feb. 6, forcing HTP construction shutdown. In addition to the 1,000 immediate job losses, GDC noted that an extended pause would put approximately 11,000 jobs at risk as well as the 95,000 jobs and $19 billion in economic activity that HTP construction is anticipated to generate overall. It said that project delays will increase the risk that the 116-year-old North River Tunnels—already a major cause of delays to passenger rail services between New Jersey and New York—would shut down.
“For months, GDC has worked cooperatively with its federal partners to meet their requirements for restoring funding,” GDC said in a statement. “GDC responded thoroughly and promptly to each request for information about the project’s federally mandated Disadvantaged Business Enterprise (DBE) program and provided documentation that the project is in compliance with the administration’s latest regulations.”
“Our goal has always been to work with our federal partners and get funding flowing again,” said Tom Prendergast, GDC CEO. “At the same time, we must hold the federal government to its contractual obligations so that construction is not halted.”
Editor’s Commentary: Holding GDC funds hostage is nothing more than the latest in a series of USDOT political shenanigans to kill congestion pricing in New York City. So far, all attempts by POTUS 47 and his Administration sycophants to squash congestion pricing have failed miserably. Congestion pricing has been an unequivocal success in providing capital project revenue for the New York Metropolitan Transportation Authority while reducing traffic congestion and air pollution, and increasing ridership on Long Island Rail Road, Metro-North, NJ Transit and PATH trains as well as on local/regional bus services. The Ringling Brothers Barnum & Bail Circus, “The Greatest Show on Earth,” may be coming to the New York City area in March, but “The Most Sickening Political Circus on Earth” has been playing 24/7 since Jan. 20, 2025. “Race and sex-based presumptions of social and economic disadvantage that violate the U.S. Constitution”? What a raccolta di stronzate! Maybe this will result in a fresh TACO? – William C. Vantuono
