Construction on the Hudson Tunnel Project can’t continue past Feb. 6 without federal funds withheld by the current White House administration, the Gateway Development Commission (GDC) said.
Work on the country’s biggest infrastructure project is expected to stop unless the Trump administration restores more than $4 billion in federal funding that was frozen in October.
“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,” said New Jersey Gov. Mikie Sherrill.
“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 the quality of life for residents in the Garden State,” Sherrill said.
The Hudson Tunnel Project
The Hudson Tunnel Project has been under construction for more than a year, following pledges of about $12 billion from the federal government. Workers have been preparing to assemble the first of two massive tunnel-boring machines, which recently arrived from Germany, the GDC said.
GDC said it notified the contractors working on the Hudson Tunnel Project that construction funding will run out on Feb. 6. GDC’s contractors will spend the next two weeks winding down work at the active construction sites in New York, New Jersey, and the Hudson River. At that time, construction will stop until additional funding becomes available.
Four major procurements that comprise the remaining construction packages for the new tunnel are also impacted by the federal funding pause. Two construction packages — the Hudson River Tunnel Project and the NJ Surface Alignment Project — are planned to start in 2026, but contracts cannot be awarded until funding resumes.
“Over the past two years, GDC, together with our federal and state partners, has 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,” said GDC CEO Thomas Prendergast.
“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,” Prendergast said.
Federal Funds Needed to Move Forward
Roughly $12 billion — 70% — of the Hudson Tunnel Project’s $16 billion budget — is funded by federal grants. The other $4 billion is funded through USDOT Build America Bureau loans to be repaid by the States of New York and New Jersey and by the Port Authority of New York and New Jersey. Funding disbursements from all of these sources have been discontinued since Oct. 1, 2025.
Congressman Frank Pallone Jr. (D-6) condemned President Trump’s decision to freeze federal funding that Congress already approved for the Gateway Tunnel project.
“Trump froze federal funding Congress already approved for the Gateway Tunnel, and now nearly 1,000 union workers who are on the project right now are about to be sent home, and construction is days from shutting down. Over the life of the Gateway Tunnel project, we’re going to see 100,000 jobs created and 20 billion dollars in economic activity, but Trump is willing to blow that up because of some made-up culture war,” Pallone Jr. said.
“Existing Hudson River rail tunnels are 115 years old, they were wrecked by Sandy, and if just one of those tunnels breaks down, three out of every four trains into New York stop running. Trump can restore Gateway funding today, or he can own the damage he is about to cause to commuters and the regional economy. This is plain reckless, and New Jersey knows exactly who is responsible,” Pallone Jr. added.
GDC has signed and executed funding agreements with all Hudson Tunnel Project funders, including
the US Department of Transportation (USDOT), the Federal Transit Administration (FTA), and the
Federal Railroad Administration (FRA). $4.38 billion in federal funding is currently
obligated to the project.
On Sept. 30, 2025, GDC received a notice from the FTA that federal disbursements under the
Capital Investment Grants (CIG) Program would be paused pending a review of the Commission’s
federally mandated Disadvantaged Business Enterprise (DBE) program. The following day, all federal
funding for the Hudson Tunnel Project — not just CIG funds — was paused.
Construction Carried On While Funding Paused
Construction has continued while federal funding disbursements have been paused. Since Oct.1, 2025
GDC has:
- Procured two tunnel boring machines. The first is on-site in New Jersey, ready for assembly, and the second is scheduled for shipment in February.
- Finished the Tonnelle Avenue bridge and made significant progress on the portal launch box, setting the stage for tunnel boring to begin in New Jersey.
- Completed two major concrete pours for HYCC-3, totaling more than 7,200 cubic yards, and broke through the bulkhead, connecting to the completed sections of the concrete casing.
- Mixed 84 primary columns and 112 secondary columns of reinforced earth in the Hudson Riverbed, bringing the total number of finished columns to 838.
- Installed 29 slurry wall panels for the Hudson County Access Shaft and 15 panels for the 12th
- Avenue Access Shaft. The Hudson County Shaft slurry wall is now more than 75% finished.
More than one billion taxpayer dollars have been spent on the construction of the Hudson Tunnel Project to date.
Almost Out of Funds
Since October, while federal funding disbursements have been paused, the GDC said it has been using available funding sources and credit to keep the project on track as planned. It has now drawn down nearly all available sources of credit and can no longer continue funding construction without access to the project’s funds.
Pausing construction will result in the immediate loss of nearly 1,000 jobs. An extended pause would put at risk approximately 11,000 construction jobs on current projects, as well as the 95,000 jobs and $19.6 billion in economic activity that the Hudson Tunnel Project is expected to generate overall, according to the GDC.
It also increases the risk that the 116-year-old North River Tunnel — already a leading cause of delays affecting hundreds of thousands of riders — will shut down, severing the most heavily used passenger rail line in the country and resulting in billions of dollars in lost time and productivity, the GDC said in a statement.
About the Gateway Program
The Gateway Program is the most urgent major infrastructure program in the country – a comprehensive set of rail investments that will improve commuter and intercity services, add needed resiliency, and create new capacity for the busiest section of the Northeast Corridor (NEC). The NEC is the most heavily used passenger rail line in the country, hosting more than 2,200 train movements and 800,000 passenger trips daily.