With an announcement by legislators that the proposed $16 billion Gateway Tunnel under the Hudson River between New Jersey and New York has received a historic $6.8 billion Federal Transit Administration grant, project officials said now, the hard part begins.
“Raising the money necessary is extremely (hard), building it is just as hard. We now have to build it,” said Anthony R. Coscia, Amtrak board chairman and Gateway Development Corporation vice president, in an interview.
Gateway will build two new Hudson River Rail Tunnels and rehabilitate the 114-year-old original tunnels built by the Pennsylvania Railroad. The new tunnels will go to Penn Station New York.
It is groundbreaking for many reasons. The $6.8 billion grant to be awarded, but not officially confirmed by the Federal Transit Administration, is the largest in U.S. history.
“It is a phenomenal accomplishment, that after all the headwinds faced and all of the delays that have been imposed on a project that is as critical as this project, we are now at a point where I’d describe this as a financial closing,” Coscia said. “My expectation is before the summer is out we will initiate major construction on the project.”
Celebrating the grant has to be “tempered with the reality that we are building” the largest infrastructure project in the country, he said.
“The actual agreement won’t be signed for a few more weeks, so when I actually sign it, that’s when we’ll exhale,” said Kris Kolluri, GDC CEO. “The federal government has notified Congress of its intent to award. But I actually get to sign the agreement, hopefully, in a couple of weeks.”
The Promise of Gateway
When completed, NJ Transit commuters and Amtrak intercity passengers will get a modern, four-track tunnel. It will unlock a major two-track bottleneck on the Northeast Corridor line between Washington D.C. and Boston, Coscia said, which is why supporters argued it was a project of national and not just regional significance. It will double rail capacity in the most important region in the county, he said.
“The deficiency of the system is a glaring problem,” he said. “Once fixed, it will be so shocking, there will be more trains, they will be quicker…we can vastly improve the mobility available to people.”
Four tracks is a global standard for high speed rail and busy corridors, Coscia said. The NEC is two tracks between Secaucus, through the existing tunnels to New York, that he said are only one infrastructure failure or train breakdown away from becoming a one-track line.
“I think we’ve lived with the inferior system for so long, we can’t fully appreciate what a modernized system will look like,” he said.
While the new tunnels are under construction, the old tunnels have to be nursed along like an old car, until they are rehabilitated. Amtrak has spent $100 million in state of good repair work on them since 2017, he said.
Gateway’s magic moment
“We are in a Goldilocks Zone environment. We may never be in this place ever again in our lifetimes,” Kolluri said. “You have the president, the (U.S. Senate) majority leader, and you have two governors who are completely in sync on the most important project in the country. I have never seen this in 25 years working in this space, and I’m telling you we’ll never see it again.”
It wasn’t always magic.
The road from the failed first iteration of a new tunnel proposed in 2010, then called ARC, to getting the final Gateway federal funding took more than a decade, and keeping it moving was a challenge.
U.S. Sens. Cory Booker and Robert Menendez, both New Jersey Democrats, were among the congressional delegation who moved and maintained momentum on Gateway funding and regulatory approvals through three presidential administrations.
“I’m so proud of how far we’ve come in securing this $6.8 billion agreement,” Booker said in a statement.
“This moment has been many years in the making — jump started under President (Barack) Obama, the project was brought to a standstill under the Trump Administration,” he said. “But thanks to President Biden and a Democratic majority in the Senate and House, we finally have the money needed to build the Hudson River Tunnels and complete Gateway.”
Booker along with U.S. Sen. Chuck Schumer, D-N.Y., and then-Govs. Chris Christie of New Jersey and Andrew Cuomo of New York brokered a 2015 agreement splitting costs between the two states and federal government.
Why is a June funding approval so important?
“Time is not our friend,” Coscia said. “Time increases costs.”
Gateway costs increased due to delays approving a federal Environmental Impact statement that had a 2018 deadline. Gateway Development officials took steps in August 2019 to reduce the cost by $1.4 billion.
In August 2022, a GDC financial analysis said the project increased $2 billion to the current $16 billion price that officials blamed on inflation and supply chain issues.
“It as important to be completely transparent with the governors and the public,” Kolluri said of going public with that information. “Otherwise you’re starting off on the wrong foot already.”
Delaying funding approval would have a rolling snowball effect on other aspects, such as the availability of specialized tunnel boring machines and and the workforce needed for construction, Coscia said.
“Construction is commodities ... obligating them again could take years,” Coscia said.
Could a new president stop Gateway?
When Donald Trump was elected president and took office in 2017, Gateway received a low ranking form his transportation secretary and the congressional delegation battled him over funding until the president changed his view in 2019.
If Trump is elected in November, could he slam the brakes on Gateway?
“We think the project is at a point where we expect it to advance and we don’t expect there would be a governmental decision to stop it,” Coscia said. “We think the project is full steam ahead and we’ve heard nothing to indicate to us there is anyone who would change that result.”
Once it is signed by all parties, the federal Full Funding Grant Agreement is legally binding on all parties, Kolluri said.
“We are bound by that agreement, and that’s the certainty that we need, regardless of what happens politically,” he said. “No person, elected or otherwise, could take a project this important — one that’s going to create 95,000 jobs and keep the nation’s economy going — and mess with it.”
Big projects, big cost overruns?
The names of major infrastructure projects that have blown their budgets and schedules are almost household names. Boston’s $14.8 billion Big Dig to replace the Central Artery highway with a tunnel was five times higher than original estimates.
Any Gateway cost overruns will not be covered by the FTA.
“The Gateway Development Commission is on the hook to cover costs beyond the agreed upon project cost,” said Larry Penner, a former FTA official. “The GDC has no financial resources of its own. They would have to turn to Amtrak, NJ Transit, Trenton and Albany to cover inevitable costs overruns.”
Coscia and Kolluri said steps have been taken to reduce that risk. The GDC has done testing and prep work to find and eliminate some of the unknown factors.
“We’ve done an enormous amount of site testing, borings and other things,” Coscia said. “The (tunnel) site has been examined from an environmental and geotechnical standpoint and solutions engineered to handle those issues.”
But the river could still have some wild cards.
“There are hundreds of pile fields (wooden fragments from piers) that date back a century or more; we’ve tried to assess where they are and what they are,” Kolluri said. But could we find something in there that is completely unknown to us? Sure.”
The GDC has prepared to address those issues as best as they can, he said.
“What I try to do is to understand the risks and try to make sure we have a strategy to address it ... which is what any good organization running a mega project focuses on,” Kolluri said. “I also know some things are inevitable, and we have to be prepared to address them.”
NJ Advance Media editorial writer Dave D’Alessandro contributed to this report.
Our journalism needs your support. Please subscribe today to NJ.com.
Larry Higgs may be reached at lhiggs@njadvancemedia.com. Follow him on X @CommutingLarry.
