Hudson Tunnel Project funding pause may halt work Feb 6

Hudson Tunnel Project funding pause could bring construction to a slowdown and then a stop if federal funding disbursements do not restart in the coming days, the Gateway Development Commission (GDC) said (GDC). Contractors have been told the funds supporting current activity are expected to be exhausted by 6 February.

Hudson Tunnel Project funding pause and the construction timeline

GDC said contractors would spend the next two weeks winding down work across sites in New York, New Jersey and the Hudson River. Once that wind-down is complete, construction would pause until further funding becomes available.

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GDC CEO Thomas Prendergast said the commission, together with federal and state partners, has made significant progress over the past two years on what he described as the most urgent passenger rail infrastructure project in the country. He added that the federal Administration’s support has been central to the work since construction began—and that, while GDC has tried to keep things moving since federal funding was paused in October, it cannot continue financing the programme “on credit indefinitely.”

Prendergast said a pause is a last resort. He also said GDC will keep working to secure funding so workers can remain on the job and the project can continue delivering reliable, 21st century infrastructure.

Federal funding suspension, grants and Build America Bureau loans

GDC estimates the Hudson Tunnel Project budget at 16 billion USD, with about 70%—roughly 12 billion USD—expected to come from federal grants.

The remaining 4 billion USD is funded through loans from the Build America Bureau, part of the US Department of Transportation (USDOT). Those loans are to be repaid by New York, New Jersey and the Port Authority of New York and New Jersey.

The commission said disbursements from all funding sources have been halted since 1 October (Railway Supply). It also said it has executed funding agreements with all project funders—including USDOT, the Federal Transit Administration (FTA) and the Federal Railroad Administration (FRA)—and that 4.38 billion USD in federal funding has been formally obligated to the project.

GDC linked the pause to late September 2025. It said the FTA notified the commission on 30 September 2025 that payments under the Capital Investment Grants programme would be paused while GDC’s Disadvantaged Business Enterprise programme was reviewed. The commission said that, the following day, all federal funding for the project was suspended.

Procurement, jobs and North River Tunnel risk on the Northeast Corridor

The funding pause is also affecting four major procurement packages that make up the remaining construction work on the new tunnel. Two packages—the Hudson River Tunnel Project and the New Jersey Surface Alignment Project—are scheduled to begin in 2026, but GDC said contracts cannot be awarded while federal funding remains suspended.

Despite the freeze, GDC said construction has continued. Since October, it has procured two tunnel boring machines, completed the Tonnelle Avenue bridge, advanced work on the New Jersey portal launch box, carried out major concrete pours at the Hudson Yards Concrete Casing, and continued ground and slurry wall works in the Hudson River, as well as at access shafts in New Jersey and Manhattan.

GDC said more than 1 billion USD in public funds has been spent on construction so far. It added that it has now drawn down nearly all available funding sources and credit and cannot continue construction without renewed access to project funds.

If construction is paused, the commission said nearly 1,000 jobs would be lost immediately. It warned that a longer stoppage could affect around 11,000 construction jobs currently associated with the project and reduce anticipated economic activity linked to the works.

GDC also said further delays increase the risk of disruption to the existing North River Tunnel, which is more than a century old and carries a significant volume of passenger rail traffic between New Jersey and New York.

The Hudson Tunnel Project is part of the wider Gateway Programme, a set of rail investments intended to increase capacity and resilience along the Northeast Corridor, which supports a large number of daily passenger and commuter rail services.

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