The basics:
- Gateway Development Commission warns Hudson Tunnel Project work will stop Feb. 6 without restored federal funding
- Nearly 1,000 potential worker layoffs, with up to 96,000 total Gateway jobs at risk if delays continue
- GDC exhausted credit line after continuing construction during the federal funding freeze
- Gov. Sherrill, Sen. Schumer, Rep. Gottheimer urge President Trump to lift the funding pause
Without a resumption of federal funding, work will stop on the critical Hudson Tunnel Project (also known as the Gateway Program) by Feb. 6, the project’s manager warned Tuesday.
During its Jan. 27 meeting, the Gateway Development Commission laid out the situation. GDC said that construction on the new rail tunnel between New Jersey and New York cannot continue until the Trump administration restores funding.
As NJBIZ reported last fall, the project found itself in the crosshairs of the Trump administration at the start of the government shutdown. At the time, the U.S. Department of Transportation said it would freeze funds for the project, pending a review of the Disadvantaged Business Enterprise program. The $16 billion undertaking has $12 million in federal funding commitments.
Despite that federal funding freeze, work has continued across five sites active in New Jersey, New York and the Hudson River. GDC has utilized a credit line, but says it is nearly exhausted.
A short-term solution
“In line with our commitment to delivering the Hudson Tunnel Project on scope, schedule and budget, we have used all resources available to keep the construction moving forward as planned while the federal funding has been paused,” said Tom Prendergast, chief executive officer, GDC. “We have not missed a day of work since October.”
Prendergast noted a series of milestones reached in that time, including:
- The manufacturing of the first two tunnel boring machines. Specially made in Germany, they will be assembled here to begin tunneling in the coming months
- Finishing the Tonnelle Avenue Bridge and making significant progress on the portal launch spot ,where the first tunnel boring machine will go into service;
- Completing two major concrete pours for the Hudson Yards Concrete Casing-3 project, more than three-quarters done;
- Continued work on the access shafts on both sides of the Hudson as well as ground stabilization in the river to prepare for the tunnel boring
“We have funded this work using our line of credit, which we were required to obtain for a condition of our full-funding grant agreement with the federal government,” said Prendergast. “Since October, we have been clear that funding construction using credit was a short-term solution. And that we could not continue construction indefinitely without un-pausing the federal funding.
“We have now drawn down nearly all of the available sources and credit – and can no longer continue funding construction without access to the original project’s funds. For that reason, we have notified our contracts that work will have to stop on Feb. 6, if additional funding does not become available. At that time, we will have exhausted all available resources to keep our construction sites open.”
We have now drawn down nearly all of the available sources and credit – and can no longer continue funding construction without access to the original project’s funds. For that reason, we have notified our contracts that work will have to stop on Feb. 6, if additional funding does not become available.
– Tom Prendergast, CEO, Gateway Development Commission
‘Serious negative consequences’
Prendergast laid out the timeline of dialogue over the last months. He also detailed the impacts to the project this delay would cause, as well as for the workers, broader economy and timetable for this critical project.
“Pausing construction, even temporarily, will have serious negative consequences,” Prendergast stressed. “First and foremost, nearly 1,000 workers who were employed working on this project will lose their jobs working on Gateway. A longer construction pause could put all 96,000 jobs that would be required to complete this entire program at risk. At minimum, talented workers may leave the project.
“There is no guarantee that we’ll be able to get our top performers back when construction resumes. Stopping construction will also impact the carefully coordinated project budget and schedule, increasing costs.”
Prendergast said that over the next two weeks, contractors would wind down work on the active construction sites – with the exception of HYCC-3. A mega-grant that was not paused funds that work.
The situation was a major flashpoint in the 2025 New Jersey gubernatorial race. After President Donald Trump declared the project terminated, it forced Republican candidate Jack Ciattarelli to play defense while Democrat Mikie Sherrill, now-governor, and a huge supporter of the project, seized on it as a key issue down the stretch.
Back and forth
Sherrill released a statement Jan. 27 in response to the current funding situation.
“The president’s refusal to fund the Gateway Tunnel project is not only an illegal attack on New Jersey but also shows a reckless disregard for our economy and the livelihoods of working families,” said Sherrill. “New Jersey and New York make up the most powerful economic region in the world, and this is the most urgent and consequential infrastructure project in the country.
“If the president does not restore funding to this project, which I helped secure while serving in Congress, he will single-handedly kill nearly 100,000 jobs and $20 billion in economic activity. New Jersey will fight tooth and nail for our hard-earned tax dollars and this essential project that will make commutes easier and improve quality of life for residents in the Garden State.”
Over the past week, there has been some back-and-forth between Trump and Senate Minority Leader Chuck Schumer, D-N.Y., on social media. Schumer is a long-term supporter and advocate for the project.
Trump wrote on Truth Social that Schumer is holding up the Gateway Project. While Schumer shot back and blamed Trump.
‘The money is already in place’
Schumer spoke at the GDC meeting Jan. 27 about the vital importance of this project, along with the long journey to secure full funding and get construction underway.
“Yet, as we stand here today, facing the absurd reality that this vital and fully funded project that is otherwise moving full-steam ahead is on the precipice of being derailed and maybe even killed,” said Schumer. “This makes absolutely no sense. Yet here we are. There is only one person who terminated Gateway, and there is only one person who could get it back on track – and that is President Trump. Make no mistake about it.”
Schumer urged Trump to pick up the phone and tell the transportation secretary to lift the hold.
“And to continue funding Gateway and the project can move forward,” said Schumer. “It’s that simple. The money is already in place.”
Essential work
U.S. Rep. Josh Gottheimer, D-5th District, another lawmaker who has strongly advocated for the project, spoke at the meeting as well.
“I want to be very direct about what we’re facing here. This transportation crisis is a five-alarm fire, nothing short of that,” said Gottheimer. “In 10 days on Feb. 6, the money runs out and shovels go down on the Gateway Project, the most consequential infrastructure project right now in the United States of America.”
Gottheimer said the project is not optional and not a luxury.
“It’s essential insurance against economic disruption and a foundational investment in America’s future,” said Gottheimer. He noted the bipartisan support for the project. “We have to finish what we started. We can’t let partisan games get in the way of years of planning, a bipartisan commitment, and construction progress. The stakes are simply too high – and the consequences too severe.
“Canceling this tunnel will kill jobs. It will crush our economy and set us back as a nation.”
Bipartisan support
Notably, U.S. Tom Kean Jr., R-7th District, stressed the importance of the project and called for restoring funding.
“The Gateway Tunnel is critical to New Jersey’s economy, our commuters, and the entire Northeast Corridor,” Kean wrote in a Jan. 26 post on X. “Delays of any kind puts jobs at risk, threaten reliability for hundreds of thousands of riders, and weaken one of the most important transportation arteries in the country.
“I am pressing for this funding to move forward in full. While there are always competing priorities in Washington – this project must be completed. I will continue fighting across administrations and working with partners in both parties to secure the federal commitment needed to complete the Gateway Tunnel.”
Prendergast added, “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.”
The U.S. Department of Transportation did not immediately respond to a request for comment.
Please stay with NJBIZ for the very latest on this developing story.
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