The Gateway plan to add a second rail tunnel linking New Jersey with Manhattan has hit funding challenges because of the uncertain commitment of the Trump administration.

The proposed White House spending plan would end a $2.3 billion per year New Starts program, which was slated to finance half of the estimated $24 billion Gateway initiative under the Hudson River. New York and New Jersey are to split the remaining costs. The Port Authority of New York and New Jersey was tapped to lead financing for Gateway project and pledged $35 million for preliminary engineering work in early 2016.

Federal funding for the estimated $24 billion Gateway Project was put in limbo after President Trump released his first budget.
Federal funding for the estimated $24 billion Gateway Project was put in limbo after President Trump released his first budget. Bloomberg News

John D. Porcari, interim head of the Gateway Development Corp., said during one of the agency’s meetings in early April that procurement strategies such design-build are being explored in conjunction with seeking federal funds. Gateway, a non-profit corporation, features former officials from Amtrak, New Jersey Transit and the Port Authority.

Porcari said in a statement last week that federal commitments should allow the first element of the Gateway Tunnel involving the replacement of the Portal North Bridge over the Hackensack River to commence soon, but stressed the need for further support to complete the larger tunnel portion of the project.

“While the partners intend to evaluate all viable procurement methodologies, any scenario will require significant state and federal funding,” said Porcari.

U.S. Sen. Charles Schumer, D-N.Y., spearheaded the creation of the nonprofit development entity in August 2015 when President Obama was in the White House, after then U.S. Transportation Secretary Anthony Foxx sent a letter urging the New York and New Jersey governors prioritize the tunnel project. Schumer, who is now Senate minority leader, said in a statement Wednesday that the Gateway development needs the attention of President Trump for the sake of commuters at Manhattan’s Penn Station and the entire regional economy.

“The bottom line is that the Gateway tunnel project is the most important infrastructure project in the country and would go a long way toward reducing delays for Long Island Rail Road, New Jersey Transit and Amtrak riders,” said Schumer. “President Trump’s budget plan zeroes-out critical federal funding for Gateway and will only intensify delays and take the project off the ‘Fast Track’ President Obama, Secretary Foxx and I put it on.”

New Jersey Gov. Chris Christie, at a Wednesday press conference in Newark calling for more federal support to enhance NJ Transit, said that he has a 15-year friendship Trump and has voiced to him the importance of funding the Gateway Tunnel.

“The president’s well aware of my point of view on this project, “ said Christie. “I absolutely will continue to speak my mind on this both publicly and privately.”

Christie joined U.S. Sen. Cory Booker, D-N.J., in calling for Transportation Secretary Elaine Chao to visit New Jersey and inspect the rail system as her predecessor Fox did under Obama.

“I join [Senator Booker] in welcoming Secretary Chao to New Jersey, showing her the infrastructure issues on the tunnel and urging her to continue with the project as it was agreed to by the last administration,” said Christie. “It’s the right thing to do for the country.”

Christie is pushing for Gateway after putting the brakes on a similar Access to the Region’s Core project in 2010 citing fears of cost overruns and the state’s lack of funds. The ARC project, which was budgeted at $8.7 billion and slated for a 2018 completion, would have featured a new tunnel under the Hudson River as well as a newly built station adjacent to Penn Station to allow increased NJ Transit capacity.

“That’s history and I hate that I have to revisit that all the time,” said a frustrated Booker during the Newark press conference when a question was raised about the cancelled ARC tunnel that would be close to completion now had it not been halted. “I’ve been the senator now for three years and we came together and we put together a plan and it was a multi-party negotiation, two different states and multiple layers of government and actually everybody leaned in.”

A Department of Transportation spokesman issued a statement saying Chao intends to tour New Jersey’s rail tunnels and that the agency is “actively engaged with the Gateway project, including being on-site and participating in regular meetings with program officials.”

The press office for President Trump did not respond to a request for comment on whether the White House will support funding the Gateway Project.

Transportation experts have pushed for Gateway to get prioritized for safety and efficiency reasons. The existing rail tunnels, which are used by an estimated 200,000 commuters a day, have been in service for 107 years and were severely damaged by seawater during Hurricane Sandy in 2012, which caused service to shut down for five days. The Port Authority has estimated a $100 million daily cost to the nation in transportation-related impacts and productivity losses if the tunnels were forced to shut down for just a 24-hour period.

“It’s so incredibly important to get this project done,” said Peter Palmer, chairman of the North Jersey Transportation Planning Authority. “Right now the Hudson River tunnels are in a very fragile state after Hurricane Sandy.”

Palmer, who is also a Republican freeholder in Somerset County, said that maintaining the New Starts program is essential for long-term capital initiatives like Gateway and that any borrowed funds will worth it due to the economic benefits the project would generate. He said that assuring reliable public transportation across the Hudson River is crucial for the future of New Jersey home values, with the Garden State at risk of losing residents and tax revenue should commuting to Manhattan become problematic. He added that trans-Hudson transit is important not just for the New York City metropolitan region, but the entire northeast corridor that serves Amtrak customers from Boston to Washington D.C.

“A great metropolitan area with a world class central city requires a world class transportation system,” said Palmer, who noted that London recently made a $20 billion investment for a brand new subway line. “Crossing the Hudson River is the most critical transportation challenge in the United States.”

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.