Feds Commit $6.88 Billion in Historic Funding For Long-Delayed Hudson River Tunnel Project

NEW YORK—News on the long-delayed Gateway Project came in fast and furious over the past few weeks, culminating with the announcement on July 6 of the largest federal transportation grant in history—$6.88 billion—that will help ramp up construction on this much-needed infrastructure project.

Work on a large component of the project—the Hudson Tunnel Project—which was stalled under the Trump Administration, is now expected to begin this year and in earnest in 2024.

Once the project begins, it is expected to create more than 72,000 American jobs in the region. The Hudson River Tunnel project is part of the Gateway Program, a series of strategic infrastructure investments designed to improve rail service in New York and New Jersey. The Hudson River Tunnel project is particularly critical because the existing North River Tunnel was severely damaged during Superstorm Sandy in 2012. While the tunnel has been repaired frequently, its age and damaged condition present reliability concerns for more than 200,000 people who travel through the tunnel on more than 400 trains every weekday. According to a study by the Northeast Corridor Commission, commuters in 2020 were delayed more than 210 hours due to maintenance issues.

U.S. Sen. Charles Schumer said the $6.88 billion in funding for the Hudson Tunnel Project marks the largest federal transportation grant ever, and the largest single transportation grant ever to New York State.

The Hudson Tunnel Project consists of two new tubes that cover four and a half miles each, and the rehabilitation of the 113-year-old existing tunnel, going from Secaucus Junction in New Jersey to Penn Station in New York. The four 21st-century tracks will connect New York and New Jersey to the rest of the rest Northeast Corridor stretching from Washington D.C. to Boston. They will eliminate a single point of failure for the NEC, providing long-term resiliency, reliability, and redundancy to the regional and national rail network.

The Gateway Development Commission, the project’s sponsor, reported that the Hudson Tunnel Project has entered the Engineering Phase of the Federal Transit Administration’s Capital Investment Grants Program and that the FTA had updated the project to receive an up to a $6.88-billion CIG Program grant. 

“Every day, 200,000 people pass through the North River Tunnel, and a closure affects not just the entire Northeast Corridor, but the entire country,” said U.S. Transportation Secretary Pete Buttigieg in announcing the record grant award. “Today, we are proud to announce that the Hudson River Tunnel project is entering the Engineering phase, moving us a huge step closer to finally revitalizing and expanding this century-old piece of American infrastructure.”

The announcement clears the way for the Hudson Tunnel Project to receive the vast majority of the federal funding needed for full construction. GDC said it expected the remainder of federal funding to become available to the project through the approximately $4 billion in Federal-State Partnership for Intercity Passenger Rail Grant Program, Rebuilding American Infrastructure with Sustainability and Equity (RAISE), and Consolidated Rail Infrastructure and Safety Improvements (CRISI) grants that have already been applied for.

Taken together, the CIG funding, along with other federal components and Amtrak’s contribution, mean the entire project is poised to have the federal funding it needs to undertake early work construction this year, and major construction in 2024. In addition, the States of New York and New Jersey, and the Port Authority of New York and New Jersey have committed to fully funding the local share of the project. The overall Gateway Program project cost has been pegged at approximately $17.18 billion.

In addition to the Hudson River Tunnel project, U.S. DOT has provided support for the Gateway program including through a CIG grant agreement for Portal North Bridge, a Mega grant for the Hudson Yard Concrete Casing, which will provide the opening of the new Hudson River tunnel on the New York side, and most recently a $25-million RAISE grant for Tonnelle Avenue, which will provide the opening of the tunnel on the New Jersey side. The Hudson River Tunnel project is also under consideration for Federal Railroad Administration grant funds.

The next phase of the CIG Program process is negotiating and reaching a Full Funding Grant Agreement between the FTA and GDC, which is expected in 2024. GDC applied to enter the critical Engineering phase in October 2022 and worked in partnership with the FTA on a risk assessment and an updated financial plan for the project.

“The Gateway Program is an essential economic engine for New York and the nation, and the Hudson Tunnel Project moving into the Engineering Phase of the FTA’s Capital Investment Grants program is a great achievement,” said New York Gov. Kathy Hochul.

U.S. Sen. Charles Schumer at a press event staged at a site overlooking the west side rail yard where portions of the Gateway Tunnel construction will take place, said the $6.88 billion in funding marks the largest federal transportation grant ever, and the largest single transportation grant ever to New York State.

“For a long time now, the Gateway project has been my passion. It’s a labor of love. And after many false starts and obstacles placed in our way, Gateway is full speed ahead with $6.88 billion ready to go and be used for critical work and construction,” Sen. Schumer. “Gateway’s future is assured and the most important public works project in America is all systems go.”

Alicia Glen, New York Commissioner and GDC Co-Chair said, “Entering into Engineering is the biggest step yet in making the entire Hudson Tunnel Project a reality. Between this action and the clear commitment from our federal partners for additional funding, we will have the resources needed to meet our commitment to the region and nation to build a new rail link between New York, New Jersey, and the entire Northeast Corridor.”

Early work is expected to begin later this year on both the Tonnelle Avenue Bridge and Utility Relocation Project in New Jersey and the Hudson Yards Concrete Casing – Section 3 in New York. GDC recently announced the launch of procurements for two major components of the project, and GDC shortlisted potential Project Delivery Partners.

In late June, a $25-million (US DOT) RAISE Grant to fund the Tonnelle Avenue Bridge and Utility Relocation portion of the project was announced.

Earlier, $700 million from the President’s Proposed Fiscal Year 2024 Budget and the Capital Investments Grants Program was earmarked for the project and President Biden announced a $292-million grant to fund the Hudson Yards Concrete Casing – Section 3 project.

Scroll to Top