Hudson Tunnel Project Receives More Federal Aid; Reduces States’ Need

Courtesy of Gateway Program

NEWARK/NEW YORK – The GDC submitted its final financial plan to the FTA; The Hudson Tunnel project will receive more federal aid and reduce the need for funding from New York and New Jersey.

In North Jersey, the Gateway Development Commission (GDC) submitted its final financial plan before it reaches a full funding grant agreement with the FTA. This is in an effort to secure funding for the Hudson Tunnel Project. RT&S reported on December 5^th that the GDC announced the beginning of construction on the project. On December 27^th, the GDC CEO Kris Kolluri sent a letter to the Board of Commissioners outlining the progress on the project. Now, the 136-page document details federal grant commitments and how much “is being paid by the local parties, including New York, New Jersey, and the Port Authority, and how cost overruns will be handled.” The FTA will review the financial plan and require a number of remaining documents (including credit assessments, legal agreements, etc.) from the commission before finalizing said agreement. 

The Hudson Tunnel Project has three components:

1. New Two-Track Rail Tunnel Under Hudson River to connect with New York Penn Station
2. North River Tunnel Rehabilitation: Renovation of the existing two-track tunnel due to its age
3. Hudson Yards Concrete Casing, Section 3: The construction of a third and final rail right-of-way preservation section underneath Hudson Yards in New York

CEO Kolluri said the “financial plan was a massive undertaking. What we submitted was a culmination of work that happened over 20 months. . . In terms of buttoning the financial piece of the project, this was a very important submission.” In the past, the GDC has secured various grants that have contributed to funding the project. Subsequently, the aid needed from New York and New Jersey decreases with this increase in federal aid. Kolluri went on to say the reduced contribution from New York and New Jersey was “seismic,” but that the increase in federal aid is thanks to “the Gateway commission’s fervent work to establish itself as a bistate agency capable of handling a project of this size, making deadlines and ensuring it has the technical and legal capacity to execute the program.”

According to the report, the total cost of the project is $16.041 billion which is slightly reduced from the assumed October 2023 figure of $16.052 billion. The breakdown of the federal aid is as follows:

• $3.8 billion from the FRA’s Federal-State Partnership for Intercity Passenger Rail Grant Program. This is an increase from the assumed amount of $3.6 billion in October 2023.
• $1.016 billion from Amtrak. This is a decrease from the assumed $1.112 billion in October 2023.
• $25 million from the FTA Capital Investment Grant program.
• $308 million from New Jersey. This is a decrease from the assumed $383 million in October 2023.
• $1.335 billion from New York. This is a decrease from the assumed $1.416 billion in October 2023.
• $2.678 billion from the Port Authority of New York and New Jersey. This is an increase from the previous total of $2.637 billion.

New Jersey’s figure is slightly lower than New York’s because New Jersey is paying for the “local portiaon of the Portal North Bridge construction, which according to the 2022 memorandum of understanding was expected to be $772.4 million.” Both New York and New Jersey were said to originally split the local share of the first phase of the Gateway Program. The first phase is three separate projects as the “Hudson Yards concrete casing project received a $292 million federal mega grant.” The three projects include: 1) the $2.3 billion Portal Bridge replacement; 2) the $600 million Hudson Yards Concrete Casing project; and 3) the $16.04 billion Hudson River tunnels construction and replacement.

It is expected in the coming weeks that the GDC will announce a project delivery partner to provide expertise on the design and engineering of the construction of the tunnel.