Gateway: Hudson Tunnel construction to pause unless Trump restores funding

The Gateway Development Commission (GDC) yesterday announced that construction of the Hudson Tunnel project will pause if disbursements of federal funds do not resume in the coming days.

GDC notified the contractors working on the project 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 at the Hudson River. At that time, construction will stop until additional funding becomes available, commission officials said in a press release.

The $16 billion Hudson Tunnel project is a key component of the Gateway program to improve rail transportation in the Northeast Corridor. It calls for construction of a new two-track rail tunnel beneath the Hudson River and rehabilitation of the existing century-old North River Tunnels that connect New Jersey and New York City. The tunnels are crucial for Amtrak and New Jersey Transit trains to transport passengers between New York and New Jersey daily.

Four major procurements that comprise the remaining construction packages for the new tunnel are also impacted by the federal funding pause, according to GDC officials. Two construction packages — the Hudson River Tunnel project and the New Jersey surface alignment project — are planned to start in 2026, but contracts cannot be awarded until funding resumes, commission officials said.

President Donald Trump in October 2025 ordered a pause on the project's federal funding until his administration could review whether the GDC was complying with his new rules for contracts with women- and minority-owned businesses.

Federal grants fund roughly $12 billion, or 70%, of the Hudson Tunnel project's $16 billion budget. The other $4 billion is funded through U.S. Department of Transportation 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 of these sources have been discontinued since Oct. 1, 2025.

"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, said GDC CEO Thomas Prendergast. "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."

GDC has signed and executed funding agreements with all Hudson Tunnel project funders, including the USDOT, the Federal Transit Administration and the Federal Railroad Administration. 

The Rail Passengers Association urged the USDOT to restore the flow of funding immediately. "This is one of the most important rail transportation projects in the nation, and it is vital that work continues," said RPA President and CEO Jim Mathews in a prepared statement. "The existing 110-year-old tunnels carry over 200,000 daily passenger trips every weekday onboard 425 trains. Any point of failure would be catastrophic for not only the region, but the entire U.S. economy."