The Gateway Development Commission (GDC) announced Jan. 27 that construction of the Hudson Tunnel Project will pause if disbursements of federal funds remain halted.
GDC notified contractors working on the Hudson Tunnel Project that funding for construction 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.
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.”
President Donald J. Trump has said numerous times that he would withhold funding from cities and states that are home to Sanctuary Cities.
Seventy percent of the Hudson Tunnel Project’s $16 billion budget – roughly $12 billion – is funded by federal grants. The remaining $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 halted since Oct. 1, 2025.
GDC has signed and executed funding agreements with all Hudson Tunnel Project funders, including the U.S. 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.
Over one billion taxpayer dollars have been spent on construction of the Hudson Tunnel Project to date. Since October, GDC has utilized available funding sources and credit to keep the project moving forward as planned while federal funding disbursements have been paused. GDC has now drawn down nearly all available sources and 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 the current projects, as well as the 95,000 jobs and $19.6 billion in economic activity that construction of the Hudson Tunnel Project is anticipated to generate overall.
It also increases the risk that the 116-year-old North River Tunnel – already a leading cause of delays that impact hundreds of thousands of riders – will shut down, severing the most heavily used passenger rail line in the country and leading to billions of dollars in lost time and productivity.
