Gateway Development Commission Secures Full Funding for Hudson Tunnel Project

On Jul 8, 2024

The Gateway Development Commission (GDC) today signed a Full Funding Grant Agreement (FFGA) with the Federal Transit Administration (FTA) for $6.88 billion in federal funding for the Hudson Tunnel Project (HTP) and closed on Railroad Rehabilitation and Improvement Financing (RRIF) loans from the Build America Bureau totaling $4.06 billion to fund the local share of the project.

With these actions, GDC has secured the entire $16 billion commitment needed to complete the Hudson Tunnel Project. This includes $12 billion in federal funding – the largest federal funding commitment to a rail transportation project in modern history.

“Today marks a significant milestone on the path to ensuring the success of our nation’s most vital infrastructure project,” said Gov. Phil Murphy. “Thanks to the leadership of our partners, both in Congress and across the Hudson, our federal government will be covering more than 70% of the total cost of the Gateway Tunnel Project. As the main artery of our nation’s economy continues to be pushed to its limits, we are now one step closer to transforming the 100-year-old infrastructure under the Hudson River.”

“This Full Funding Grant Agreement will provide the critical resources needed to deliver an essential piece of infrastructure that will bring millions of visitors to New York every year,” added New York Governor Kathy Hochul. “I am proud of the work we have done with President Biden, Secretary Buttigieg, Amtrak, and our partners in New Jersey to advance this project and I thank Majority Leader Schumer and the New York Congressional delegation for providing their support.”

The HTP will eliminate one of the biggest risks of failure on the Northeast Corridor by building two additional tracks and rehabilitating the existing North River Tunnel, resulting in four modern tracks between New York and New Jersey. The new tunnel will be in service by 2035 and the full rehabilitation of the existing tunnel will be complete by 2038.

The total $16 billion cost of the HTP will be split 70/30 between the federal government and the project’s local partners: New York, New Jersey, and the Port Authority of New York and New Jersey (PANYNJ). This arrangement saves the local partners multiple billions of dollars compared to the original plan to split the project costs 50/50.

The FFGA signed today represents a commitment from FTA to provide $6.88 billion for the HTP through the New Starts Capital Investment Grant (CIG) Program. This is the largest grant in the history of the CIG Program and the largest single funding source for the HTP. The federal government has also committed $3.8 billion to the project through USDOT’s Federal-State Partnership for Intercity Passenger Rail (FSP) Program, $292 million from the Bipartisan Infrastructure Law’s Mega grant program, and $25 million through the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) Program. Amtrak is contributing an additional $1 billion.

The low-interest RRIF loans that GDC closed on today will fund the local share of the project. These three loans, totaling $4.06 billion, represent the largest aggregate loan the USDOT has provided through the RRIF program.

Construction of the HTP started on both sides of the Hudson River in November 2023 and is expected to create 95,000 jobs and generate $19.6 billion in economic activity.

In New Jersey, the Tonnelle Avenue Bridge and Utility Relocation Project is building a new roadway bridge to allow for a connection to the new tunnel portal and an access point for Tunnel Boring Machines. In Manhattan, work is underway on the Hudson Yards Concrete Casing Section 3 (HYCC-3) Project that will preserve a rail right-of-way to link the new Hudson Tunnel to New York Penn Station.

The actions taken today also enable GDC to move forward with heavy construction and tunnel boring activity. Heavy construction will begin in the coming weeks with the Hudson River Ground Stabilization (HRGS) Project, which will stabilize the riverbed on the Manhattan side of the Hudson River to enable the Tunnel Boring Machines to excavate the new tunnel.

By the end of 2024, GDC will have awarded contracts for more than $5 billion in construction activity, including contracts to build sections of the tunnel passing through the Palisades in New Jersey and going through the Manhattan bulkhead under Hudson River Park, and will have ordered the first Tunnel Boring Machine.

“Today marks the culmination of securing funding for a project that stands as the most consequential undertaking of our generation and for the next hundred years in this region. The commitment from all levels of government – local, state, and federal – underscores the profound understanding of this project’s significance,” said NJ TRANSIT President & CEO Kevin S. Corbett. “As a primary user of the current tunnels, no one knows better than NJ TRANSIT and our riders about the desperate need for the new tunnels.”

“After years of planning and persistence, the Hudson Tunnel Project’s days of uncertainty are finally behind us. For twenty-three months, we worked tirelessly to complete the funding puzzle for this vital project. Today we have secured the funding needed to see this project through,” said Kris Kolluri, GDC Chief Executive Officer. “I am proud that we navigated the complex FFGA process without missing a single deadline and thankful for our partners in the Biden Administration, Majority Leader Schumer, Governor Hochul and Governor Murphy, our Congressional delegations, and our many other supporters in Washington, New Jersey, and New York whose dedication to this critical project enabled us to reach this milestone. We look forward to continuing to work together through the construction process.”

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