The Port Authority of New York and New Jersey has agreed to partner with the federal government to advance plans for a new Gateway Tunnel rail project connecting New Jersey to Manhattan.

The Port Authority's board of commissioners authorized at their Dec. 10 meeting for the agency to consult with the U.S. Department of Transportation and Amtrak about establishing a development corporation that would oversee construction and execution of the estimated $20 billion initiative. The corporation will have board representation from New York and New Jersey through the Port Authority and the federal government will be represented by the USDOT and Amtrak. A Port Authority designee will also act as chair of the entity while working coordinating with affected regional agencies like New Jersey Transit.

"I'd argue there is no other agency in the region or in the nation with the capability to lead this project," said Port Authority vice chairman John Degnan in a press conference following the meeting. "At a transportation summit in May the chairman of the Amtrak board said they didn't have the capability to do this. He begged the Port Authority to do it."

Degnan added that how the project will be financed has not been determined and did not rule out a contribution from user fees contributing to it.

The Port Authority's action comes a month after U.S. senators Chuck Schumer, D-N.Y. and Cory Booker, D-N.J. secured a commitment from the U.S. Department of Transportation and Amtrak to cover no less than 50% of project costs via grants and funding from other federal government sources. New York and New Jersey would then fund the remainder. New York Gov. Andrew Cuomo and New Jersey Gov. Chris Christie asked the Port Authority to take the lead financing role on the project as part of their agreement.

Around 200,000 riders a day use the existing Amtrak trans-Hudson tunnels, which are more than a century old and in need of significant rehabilitation after they were inundated with seawater during Superstorm Sandy in 2012. Port Authority officials estimate that if the tunnels were taken out of service for one day there would be a $100 million cost to the nation in terms of transportation-related impacts and productivity losses.

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