DALLAS – Gateway Program trustees hired a French private financing expert as its interim chief financial officer on Thursday as the board issued a request for information from potential private partners in a $13 billion project to build a new dual-track rail tunnel beneath the Hudson River.
New Gateway CFO Francis Sacr, who headed French bank Societe Generale’s infrastructure finance team for the Americas, was also an advisor for LaGuardia Airport’s $4 billion P3 terminal renovation now underway.
The Hudson Tunnel is part of the first phase of the $24 billion Gateway Program. It involves the construction of a new two-track rail tunnel beneath the Hudson River under New Jersey and Manhattan to directly serve Penn Station New York. The project includes the rehabilitation of the 106-year-old North River Tunnel that was heavily damaged by flooding during Hurricane Sandy in 2012.
The RFI solicitation from the Gateway Program Development Corp. said trustees are seeking “innovative ideas from private sector leaders to help inform planning for the procurement and delivery, including potential design, construction and financing solutions” for the tunnel and a final section of the Hudson Yards concrete casing that would link the new tunnels to the rail lines leading to Penn Station.
Deadline for submissions from interested private partners is Sept. 15.
The request is an example of how Gateway is exploring the available funding and project delivery scenarios needed to complete the project as quickly and as cost-effectively as possible, said interim director John D. Porcari.
“This is the most urgent infrastructure project in America,” he said. “We have not a minute to lose.”
The Port Authority of New York and New Jersey has estimated a $100 million cost to the nation in transportation-related economic and productivity losses for every day that the tunnels used by 200,000 commuters are forced to shut down.
Interest from the private sector in the Gateway project has been very high, Porcari said.
Gateway wants to draw on the skill and experience of industry professionals and incorporate their best practices, said chairman Richard H. Bagger.
“This RFI is a part of the Gateway Development’s commitment to engage private sector leaders with expertise in major infrastructure projects to seek innovations in delivering them better, faster, and cheaper,” Bagger said.
The board in June approved the search for private partners and for a law firm that would set parameters and oversee the selection process.
Porcari had said at the June meeting that the P3 financing might be an attractive option for Gateway because the board was not sure the project would receive the needed funding under President Trump’s $1 trillion infrastructure renewal proposal, which is expected to be unveiled next month.
Amtrak, New Jersey Transit, and the Port Authority have committed their share of funding to the Gateway project, but the Federal Transit Administration had been expected to provide half the costs for the rail tunnels with a New Starts grant, Porcari said.
The White House's proposed budget for fiscal 2018 would eliminate New Starts funding for projects like Gateway without an existing grant commitment. The $2.3 billion per year New Starts program had been expected to finance half of the estimated cost for the rail tunnels under the Hudson River. New York and New Jersey would split the remaining costs.
The Senate Appropriations Committee in late July approved a spending plan for the project that includes $2.1 billion of New Starts grants. The House Appropriations Committee had earlier adopted a measure that would provide $1.75 billion for New Starts next year, down $660 million from fiscal 2017 but $520 million more than requested by the Trump administration.