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Gateway Development Commission Secures Full Funding for Hudson Tunnel Project

Authored by: Press Release

The Gateway Development Commission (GDC) today signed a Full Funding Grant Agreement (FFGA) with the Federal Transit Administration (FTA) for $6.88 billion in federal funding for the Hudson Tunnel Project (HTP) and closed on Railroad Rehabilitation and Improvement Financing (RRIF) loans from the Build America Bureau totaling $4.06 billion to fund the local share of the project.

With these actions, GDC has secured the entire $16 billion commitment needed to complete the HTP. This includes $12 billion in federal funding – the largest federal funding commitment to a rail transportation project in modern history.

“Today the Biden-Harris Administration and USDOT are fulfilling their promise to the riders of New York, New Jersey, and the entire Northeast Corridor by providing $11.7 billion in federal funding for the Gateway Project and over $4 billion in federal loans,” said USDOT Deputy Secretary Trottenberg. “Today is a momentous occasion in a years-long collaboration to build a new Hudson River Crossing, bringing together USDOT, Congress, two states, Amtrak, the Port Authority, local officials, labor partners, and more. Together, we are investing in a project that will move Americans forward and contribute to the economic growth of our nation.”

The HTP will eliminate one of the biggest risks of failure on the Northeast Corridor by building two additional tracks and rehabilitating the existing North River Tunnel, resulting in four modern tracks between New York and New Jersey. The new tunnel will be in service by 2035 and the full rehabilitation of the existing tunnel will be complete by 2038.

The total $16 billion cost of the HTP will be split 70/30 between the federal government and the project’s local partners: New York, New Jersey, and the Port Authority of New York and New Jersey (PANYNJ). This arrangement saves the local partners multiple billions of dollars compared to the original plan to split the project costs 50/50.

“Every day, hundreds of thousands of commuters travel between New Jersey and New York. The Hudson Tunnel Project will ensure these commuters have the reliable rail service they deserve, setting the stage for long-term economic growth on both sides of the Hudson.” said Balpreet Grewal-Virk, New Jersey GDC Commissioner and Co-Chair. “Finalizing the FFGA and the RRIF loans for this project is a key milestone that enables us to confidently say there is a light at the end of the tunnel for commuters struggling with unpredictable service.”

The FFGA signed today represents a commitment from FTA to provide $6.88 billion for the HTP through the New Starts Capital Investment Grant (CIG) Program. This is the largest grant in the history of the CIG Program and the largest single funding source for the HTP. The federal government has also committed $3.8 billion to the project through USDOT’s Federal-State Partnership for Intercity Passenger Rail (FSP) Program, $292 million from the Bipartisan Infrastructure Law’s Mega grant program, and $25 million through the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) Program. Amtrak is contributing an additional $1 billion.

The low-interest RRIF loans that GDC closed on today will fund the local share of the project. These three loans, totaling $4.06 billion, represent the largest aggregate loan the USDOT has provided through the RRIF program.

Construction of the HTP started on both sides of the Hudson River in November 2023 and is expected to create 95,000 jobs and generate $19.6 billion in economic activity.

In New Jersey, the Tonnelle Avenue Bridge and Utility Relocation Project is building a new roadway bridge to allow for a connection to the new tunnel portal and an access point for Tunnel Boring Machines. In Manhattan, work is underway on the Hudson Yards Concrete Casing Section 3 (HYCC-3) Project that will preserve a rail right-of-way to link the new Hudson Tunnel to New York Penn Station.

The actions taken today also enable GDC to move forward with heavy construction and tunnel boring activity. Heavy construction will begin in the coming weeks with the Hudson River Ground Stabilization (HRGS) Project, which will stabilize the riverbed on the Manhattan side of the Hudson River to enable the Tunnel Boring Machines to excavate the new tunnel.

By the end of 2024, GDC will have awarded contracts for more than $5 billion in construction activity, including contracts to build sections of the tunnel passing through the Palisades in New Jersey and going through the Manhattan bulkhead under Hudson River Park, and will have ordered the first Tunnel Boring Machine.

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