Work On Gateway Tunnel Project Linking New York And New Jersey To Pause Next Month Without Federal Dollars

Construction on the nation’s largest public works project will pause in early February unless the Trump administration releases money it has held up since last fall, according to a person close to the project granted anonymity to discuss a sensitive matter.

The Hudson River tunnel project — a $16 billion pair of train tubes to connect New York and New Jersey — is running out of money and a Feb. 6 pause will force 1,000 layoffs, including hundreds of laborers, according to the person.

The Trump administration threatened to defund the project at the start of last year’s government shutdown. Since then, administration officials have been putting out mixed signals, with some insisting it would get its money.

But President Donald Trump has taunted Senate Minority Leader Chuck Schumer, a New York Democrat who has championed the rail link, by saying the project was “terminated.” The two had a rare one-on-one meeting about the project earlier this month and Schumer warned the president that the project urgently needs money. The federal government promised during the Biden administration that it would pick up the bulk of the project’s costs.

Construction has so far been uninterrupted because the bistate agency in charge of construction, the Gateway Development Commission, has a $500 million line of credit from Bank of America.

It’s now at the end of the line.

The agency will discuss the dire situation at a Tuesday board meeting. The pause will affect four of five work sites — a fifth is funded by Amtrak.

Tom Wright, the head of the influential Regional Plan Association that supports the project, said he plans to testify at the meeting.

He said there are some ongoing talks about trying to get the agency more money to keep construction going. One idea is a letter of credit from another bistate agency, the Port Authority of New York and New Jersey. But it’s unclear if the states would put themselves on the hook for an ever larger piece of a project they cannot afford to do on their own.

“It might buy time, but if it doesn’t solve the problem, even advocates for the tunnel aren’t sure it makes sense to do or not," Wright said.

Wright worries that pausing construction now will upend the whole project.

“When they cut the cord somewhere along the way, you can’t just pick it up a week or a month or six months later and say let’s get going again,” he said.

If the project collapses, it won’t be the first time. In 2009, there was a ceremonial groundbreaking for a previous version of the tunnel, which requires cooperation from the federal government, New York and New Jersey. A year later, New Jersey’s then-Gov. Chris Christie, a Republican, pulled state funding. Workers who had started digging the tunnel entrance had to fill it back in.