$16 Billion Tunnel Project to Resume After Trump Admin Releases Withheld Funds

Construction on a new $16 billion set of rail tunnels under the Hudson River will resume after the Trump administration released millions of dollars in federal funding that had been frozen for months.

The Gateway Development Commission, the bi-state agency overseeing the project, said on Feb. 18 that it had received the full federal reimbursement that had been withheld and that it has more than $205 million available to mobilize the massive infrastructure effort.

“Letters will be sent to contractors today, and construction activities are expected to resume next week,” the commission said in a statement. “We continue to pursue all avenues to secure access to the full amount of federal funding for the Hudson Tunnel Project, including our lawsuit.”

The Gateway Development Commission halted work earlier this month after the administration suspended reimbursements in October. The release of funds follows a federal judge’s order compelling the administration to hand over the frozen money. A federal appeals court is currently scheduled to consider an appeal of that order by Transportation Secretary Sean Duffy.

New York Gov. Kathy Hochul confirmed in a statement that work will restart next week, calling the development a “major win for workers and commuters.”

The project aims to provide relief for approximately 200,000 daily riders who currently rely on a tunnel system opened in 1910. The 115-year-old infrastructure requires increasingly intensive maintenance, and the situation was worsened by Hurricane Sandy in 2012, which flooded the tunnels with corrosive salt water. Officials from both New York state and New Jersey say that the old tunnels must be supplemented with new tubes to prevent a total transit collapse.

The financing plan for the Gateway project relies heavily on federal dollars. Federal grants and loans are expected to cover roughly 70 percent of the costs, with New York and New Jersey splitting the remaining 30 percent.

The funding pause coincided with the first day of this past fall’s federal government shutdown, the result of a standoff in which Senate Minority Leader Chuck Schumer (D-N.Y.) led the effort to block President Donald Trump’s funding plan, which did not include an extension of health insurance subsidies for the Affordable Care Act.

The Transportation Department justified the hold by citing a new federal rule, under which the commission must ensure that race and sex are not used as automatic “presumptions of social and economic disadvantage” when awarding contracts.

Although New York and New Jersey officials accused the Trump administration of politicizing the funding as leverage in the shutdown fight, the White House pushed back, blaming Democrats for the delay.

“It’s Chuck Schumer and Democrats who are standing in the way of a deal for the Gateway tunnel project by refusing to negotiate,” a White House spokesman said in January. “There is nothing stopping Democrats from prioritizing the interests of Americans over illegal aliens and getting this project back on track.”

Schumer’s office did not respond to a request for comment regarding the latest release of funds.

Hochul, meanwhile, said she personally urged Trump to release the money, stressing that many of the construction workers laid off during the suspension were his supporters. She said she was prompted to call after seeing a Truth Social post in which Trump voiced skepticism about the project’s management.

In that post, Trump warned that the project would be “financially catastrophic for the region” without “hard work and proper planning.”

“Under no circumstances, will the Federal Government be responsible for ANY COST OVERRUNS—NOT ONE DOLLAR!” Trump wrote. “The Federal Government is willing to meet, however, to make sure that this does not happen!”