Hudson Tunnel Project to pause construction Feb. 6 if federal funding does not resume
Construction of the Hudson Tunnel Project (HTP) will pause on Feb. 6 if disbursements of federal funds do not resume. The HTP is one of the largest infrastructure projects in U.S. history. The project, which has a target completion of 2035, aims to provide long-term resiliency and reliability for the regional and national rail network for New Jersey Transit and Amtrak riders.
Currently, four major procurements that comprise the remaining construction packages for the new tunnel are also impacted by the federal funding pause. Two construction packages—the Hudson River Tunnel Project and the NJ Surface Alignment Project—are planned to start in 2026, but contracts cannot be awarded until funding resumes.
The Gateway Development Commission (GDC) was created in 2019 by the states of New York and New Jersey as a special purpose entity to build the projects of the Gateway Program, including the HTP. GDC CEO Thomas Prendergast notes that while the HTP has made progress, the lack of funding could slow down everything, including the timeline.
“Over the past two years, GDC, together with our federal and state partners, have made significant progress building the most urgent passenger rail infrastructure project in the country,” Prendergast said. “The progress we have made since the project started construction would not have been possible without the support of the federal administration. 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. 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.”
According to the GDC, 70% of the project’s $16 billion budget—roughly $12 billion—is funded by federal grants. The other $4 billion is funded through U.S. Department of Transportation (USDOT) 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.
GDC has signed and executed funding agreements with all HTP funders, including USDOT, the Federal Transit Administration (FTA) and the Federal Railroad Administration, as well as $4.38 billion in federal funding that is currently obligated to the project.
On Sept. 30, 2025, GDC received a notice from the FTA that federal disbursements under the Capital Investment Grants (CIG) Program would be paused pending a review of the commission’s federally mandated disadvantaged business enterprise (DBE) program. The following day, all federal funding for the HTP, not just CIG funds, was paused.
GDC notes construction has continued while federal funding disbursements have been paused. Since Oct. 1, GDC has:
- Procured two tunnel boring machines. The first is on site in New Jersey, ready for assembly, and the second is scheduled to be shipped in February.
- Finished the Tonnelle Avenue bridge and made significant progress on the portal launch box, setting the stage for tunnel boring to begin in New Jersey.
- Completed two major concrete pours for Hudson Yards Concrete Casing Section 3, totaling more than 7,200 cubic yards, and broke through the bulkhead, connecting to the completed sections of the concrete casing.
- Mixed 84 primary columns and 112 secondary columns of reinforced earth in the Hudson riverbed, bringing the total number of finished columns to 838.
- Installed 29 slurry wall panels for the Hudson County Access Shaft and 15 panels for the 12th Avenue Access Shaft. The Hudson County Shaft slurry wall is now more than 75% finished.