Construction on the Hudson Tunnel Project (HTP), a key component of the Gateway Program, will “pause if disbursements of federal funds do not resume in the coming days,” the Gateway Development Commission (GDC) reported Jan. 27.
The pause is “an absolute last resort,” according to Thomas Prendergast, CEO of GDC, which has oversight of the $16 billion project, but work cannot be funded “on credit indefinitely.”
The Hudson Tunnel Project is building nine miles of passenger rail track between New York and New Jersey, including nearly five miles of tunnel boring to construct a new, two-tube tunnel under the Hudson River, and rehabilitating the existing North River Tunnel, which has been in service since 1910 and is said to be a source of chronic delays for hundreds of thousands of daily passengers. When the project is completed, there will be four modern tracks between New Jersey and New York where there are currently only two.
GDC reported that project contractors have been notified that funding for construction will run out Feb. 6. “GDC’s contractors will spend the next two weeks winding down work at the active construction sites in New York, New Jersey, and the Hudson River,” it said. “At that time, construction will stop until additional funding becomes available.”
Four major procurements that comprise the remaining construction packages for the new tunnel are also impacted by the federal funding pause, GDC reported. Two construction packages—the Hudson River Tunnel Project and the NJ Surface Alignment Project—are planned to start in 2026, but contracts cannot be awarded until funding resumes, according to GDC.
Of the Hudson Tunnel Project’s $16 billion budget, roughly $12 billion—70% percent—is funded by federal grants and the remaining $4 billion is funded through USDOT Build America Bureau loans to be repaid by the States of New York and New Jersey and by the Port Authority of New York and New Jersey. “Funding disbursements from all these sources have been discontinued since Oct. 1 of last year,” GDC said. “GDC has signed and executed funding agreements with all Hudson Tunnel Project funders, including the U.S. Department of Transportation (USDOT), the Federal Transit Administration (FTA), and the Federal Railroad Administration (FRA). $4.38 billion in federal funding is currently obligated to the project.”
“On Sept. 30, 2025, GDC received a notice from the FTA that federal disbursements under the Capital Investment Grants (CIG) Program would be paused pending a review of the Commission’s federally mandated Disadvantaged Business Enterprise (DBE) program,” GDC reported. “The following day, all federal funding for the Hudson Tunnel Project—not just CIG funds—was paused.”
According to GDC, construction has continued while federal funding disbursements have been paused (watch live feeds from construction sites here). Since Oct. 1, GDC said it has:
- “Procured two tunnel boring machines. The first is on site in New Jersey, ready for assembly, and the second is scheduled to be shipped in February.
- “Finished the Tonnelle Avenue bridge and made significant progress on the portal launch box, setting the stage for tunnel boring to begin in New Jersey.
- “Completed two major concrete pours for HYCC-3, totaling more than 7,200 cubic yards, and broke through the bulkhead, connecting to the completed sections of the concrete casing.
- “Mixed 84 primary columns and 112 secondary columns of reinforced earth in the Hudson riverbed, bringing the total number of finished columns to 838.
- “Installed 29 slurry wall panels for the Hudson County Access Shaft and 15 panels for the 12th Avenue Access Shaft. The Hudson County Shaft slurry wall is now more than 75% finished.”
“More than one billion taxpayer dollars have been spent on construction of the Hudson Tunnel Project to date,” said GDC, which noted that since October it has utilized “available funding sources and credit to keep the project moving forward as planned.” GDC now has “drawn down nearly all available sources and credit,” it said, “and can no longer continue funding construction without access to the project’s funds.”
According to GDC, pausing construction “will result in the immediate loss of nearly 1,000 jobs,” and an extended pause “would put at risk approximately 11,000 construction jobs on the current projects, as well as the 95,000 jobs and $19.6 billion in economic activity that construction of the Hudson Tunnel Project is anticipated to generate overall.” GDC also warned that pausing construction “increases the risk that the 116-year-old North River Tunnel—already a leading cause of delays that impact hundreds of thousands of riders—will shut down, severing the most heavily used passenger rail line in the country and leading to billions of dollars in lost time and productivity.”
“Over the past two years, GDC, together with our federal and state partners, have made significant progress building the most urgent passenger rail infrastructure project in the country,” Thomas Prendergast said. “The progress we have made since the project started construction would not have been possible without the support of the federal Administration. Since federal funding was paused in October, we have done everything in our power to keep construction moving forward as planned, but we cannot fund this work on credit indefinitely. Pausing construction is the absolute last resort, and we will continue working around the clock to secure funding so that the workers who are counting on this project to pay their bills can stay on the job and we can continue delivering the reliable, 21st century infrastructure America needs.”
According to a New York Times report, “Senator Chuck Schumer, the New York Democrat and minority leader who shepherded the tunnel project through the complex process of obtaining federal funding, said at the [Jan. 27 GDC Board] meeting [during which the GDC announced the potential work stoppage] that the Gateway tunnel was ‘the largest and most important infrastructure project in the nation.’ Now, Mr. Schumer said, the project is ‘on the precipice of being derailed and maybe killed.’”
POTUS 47 “did not accede to Mr. Schumer’s pleas” to “stop withholding the funding” when they met earlier this month, and in a social media post “[l]ast week, he held Mr. Schumer responsible for the suspension,” the Times reported.
According to the newspaper, the USDOT “did not respond to a request for comment,” and White House spokesman Kush Desai said, “It’s Chuck Schumer and Democrats who are standing in the way of a deal for the Gateway tunnel project by refusing to negotiate with the Trump administration.”
WATCH GDC BOARD MEETING BELOW:
(Courtesy of GDC, which noted that the video includes “elected officials, union workers, construction industry representatives, and business leaders from New York and New Jersey [who] called on [POTUS 47] to restore federal funding for the Hudson Tunnel Project.”)
Further Reading:
- POTUS 47: Hudson Tunnel Project ‘Terminated.’ DOT Says Not True
- MPA Contract Expanded for Hudson Tunnel Project
- Gateway: HTP Makes Concrete Progress
- GDC Awards Manhattan Tunnel Project Contract
- GDC Issues RFQ for New Jersey Surface Alignment Project
- For Hudson Tunnel Project, $2.7B in Federal Grants Now Available for Construction
- Hudson Tunnel Project Primed for FFGA
- GDC Submits FTA Documentation for Hudson Tunnel Project Funding
