On Feb. 6, the Gateway Development Commission announced that the construction of the Hudson Tunnel Project (HTP) would be suspended beginning at 5 p.m. if federal funding towards the project does not resume. Four major procurements that make up the remaining construction packages for the HTP will also be put on hold.
Delaying the completion of the HTP draws an increased risk that the 116-year-old North River Tunnel, which already causes significant delays, could shut down. The risk of a shutdown could lead to billions of dollars in lost time and productivity.
The pause in construction will result in the immediate loss of almost 1,000 jobs. A continuation of the pause could put roughly 11,000 jobs in jeopardy on current projects. Additionally, the 95,000 jobs and $19.6 billion in economic activity that is expected to be generated from the project would also be eliminated.
“For more than two years the hardworking men and women building the Hudson Tunnel Project have not missed a day of work, said Gateway Development Commission CEO Tom Prendergast. “That will change today, because the federal Administration continues to withhold funding for this vital investment in our nation’s rail infrastructure. After spending more than $1 billion, and countless hours of hard work, on this project, we will be left with empty construction sites in New York and New Jersey.”
The majority of the HTP is funded by federal grants, playing a major role in the development of the project. The U.S. Department of Transportation (USDOT) and Gateway Development Commission have been legally bound to the terms of Capital Investment Grants (CIG), Federal-State Partnership (FSP) Grant, as well as RAISE Grant Agreements and Railroad Rehabilitation and Investment Financing (RRIF) loans since full funding for the HTP was secured in July 2024. Over $1 billion of construction and investment has already gone into the HTP.
“2026 was supposed to be a year of major milestones for the Hudson Tunnel Project, said New Jersey Gateway Development Commission Commissioner and Co-Chair Balpreet Grewal-Virk. “Tunnel boring was supposed to start in New Jersey. Two major construction contracts were going to be awarded, creating tens of thousands of new jobs. Instead, nearly 1,000 workers will lose their jobs, and our construction sites will turn into ghost towns because our federal funding is being withheld. In the days and weeks ahead, GDC is going to continue doing everything we can to get funding restored so the many hardworking men and women employed by the Hudson Tunnel Project can get back to work, and we can go back to celebrating milestones on the way to delivering this urgently needed new tunnel.”
Despite prior contractual commitments that were made regarding funding, the federal government has suspended the release of funds since Oct. 1, 2025. After cooperating with federal partners for months to meet stated requirements, the Gateway Development Commission filed a lawsuit against the federal government in the U.S. Court of Federal Claims, seeking judgment that could release the funds for the HTP.
The HTP proposes the construction of a new tunnel and associated railroad infrastructure to carry passenger rail trains under the Hudson River, while the existing tunnel undergoes work. The project would provide an alternative option for New Jersey residents to cross over into New York City, while experiencing a seamless transit experience.