The funding hole for the Hudson Tunnel Project appears to be much deeper than the tube itself, and there are no signs of it hitting rock bottom.
The main highlight of the Gateway Project is quickly becoming the victim of inflation costs. A revised financial plan puts the total cost of the tunnel project at $11.6 billion, which is up $275 million since project submittal in 2019. The Port Authority of New York and New Jersey sent the Federal Transit Administration a letter notifying the agency of the price change.
The Port Authority of New York and New Jersey says the main reason for the spike is due to inflation. The letter specifically states the increase is due to the escalation as a result of the delay in issuing the final environmental impact statement and record of decision and the ensuing ineligibility to receive federal funds required for advancing into full construction.
The additional costs will be split evenly between the Port Authority of New York and New Jersey, Amtrak, NJ Transit, the Gateway Corporation, and the federal government.
The revised financial plan ups the request for federal grant funding to almost $4.5 billion, and the amount of the federal portion will now be 44.3 percent instead of 44 percent. Local funding will have to contribute an estimated $5.5 billion.
A year ago project planners, in an effort to get the project moving, announced they found a way to decrease the cost of the Hudson Tunnel Project. That effort now appears to be fruitless.