Construction on the Hudson Tunnel Project is set to halt on February 6 unless federal funding resumes, according to an announcement from the Gateway Development Commission (GDC). The commission informed contractors that current funds will be depleted by that date, and preparations are underway to wind down work at sites in New York, New Jersey, and under the Hudson River.
The pause in federal funding also affects four major construction contracts for the new tunnel. Two of these—covering the main Hudson River Tunnel and the NJ Surface Alignment—were scheduled to begin in 2026 but cannot proceed until financing is restored.
GDC CEO Thomas Prendergast said, “Over the past two years, GDC, together with our federal and state partners, have made significant progress building the most urgent passenger rail infrastructure project in the country. The progress we have made since the project started construction would not have been possible without the support of the federal Administration. Since federal funding was paused in October, we have done everything in our power to keep construction moving forward as planned, but we cannot fund this work on credit indefinitely. Pausing construction is the absolute last resort, and we will continue working around the clock to secure funding so that the workers who are counting on this project to pay their bills can stay on the job and we can continue delivering the reliable, 21st century infrastructure America needs.”
Governor Mikie Sherrill commented on President Trump’s decision regarding project funding: “The president’s refusal to fund the Gateway Tunnel project is not only an illegal attack on New Jersey, but also shows a reckless disregard for our economy and the livelihoods of working families. New Jersey and New York make up the most powerful economic region in the world, and this is the most urgent and consequential infrastructure project in the country. If the president does not restore funding to this project, which I helped secure while serving in Congress, he will single-handedly kill nearly 100,000 jobs and $20 billion in economic activity. New Jersey will fight tooth and nail for our hard-earned tax dollars and this essential project that will make commutes easier and improve quality of life for residents in the Garden State.”
The $16 billion Hudson Tunnel Project relies heavily on federal grants for its budget—about $12 billion comes from these sources—with another $4 billion financed through loans from USDOT’s Build America Bureau that must be repaid by New York State, New Jersey State, and Port Authority entities. All disbursements from these sources stopped as of October 1 last year.
The GDC has established agreements with all primary funders—including USDOT, Federal Transit Administration (FTA), and Federal Railroad Administration (FRA)—and currently has $4.38 billion obligated federally for use.
On September 30 last year, FTA notified GDC it would pause Capital Investment Grants pending a review of GDC’s Disadvantaged Business Enterprise program compliance; all other federal funds were halted soon after.
Since then more than one billion taxpayer dollars have been spent keeping construction going using available funds and credit lines; however these resources are now almost exhausted.
If construction pauses next month as projected due to lack of access to further funds, about 1,000 jobs will be lost immediately. A longer stoppage could jeopardize approximately 11,000 existing construction jobs along with nearly 95,000 additional positions anticipated over time if work continues uninterrupted. In total nearly $19.6 billion in economic activity tied to completion could be at risk.
There are also concerns about increased pressure on aging rail infrastructure: The North River Tunnel—which is over a century old—is already responsible for frequent delays affecting hundreds of thousands of riders daily. Prolonged disruption could increase chances it may need emergency closure—threatening service along one of America’s busiest passenger rail corridors.
