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Home » Rail & Intermodal » NY-NJ Rail Tunnel Work May Halt Again Without Federal Funds

NY-NJ Rail Tunnel Work May Halt Again Without Federal Funds

A concrete tunnel dug into the ground with yellow scaffolding along the top

Photo: Bloomberg

March 11, 2026
Bloomberg

The agency building a $16 billion rail tunnel under the Hudson River warned on March 10 that construction will halt again within two to three months unless the Trump administration resumes funding, following a February shutdown after the U.S. Department of Transportation withheld promised money.

The new tunnel would link New Jersey and Manhattan and serve Amtrak and New Jersey Transit trains, while the existing rail tube, which opened in 1910, needs rehabilitation. The Transportation Department has withheld project funds since October. Gateway sued last month to release the money, and New Jersey and New York filed a similar lawsuit.

Work resumed after a federal judge ordered the Trump administration to allocate reimbursement funds Gateway had been seeking. The agency received a combined $254 million since the court’s ruling last month. The federal government suspended reimbursement payments while it reviews whether the project follows a new administration rule that prohibits contracting requirements based on race or gender.

The Hudson River tunnel is one of the nation’s biggest infrastructure projects and would expand rail capacity between the two states while generating $19.6 billion in economic activity, according to Gateway.

“We will have no choice but to stop work again if the federal government does not continue to disburse the funds that are committed to the project,” Tom Prendergast, Gateway’s chief executive officer, said in a March 10 statement. “This project is too important to delay. That’s why we’re doing everything possible to regain consistent and predictable access to all our federal funding so we can keep our workers on the job and deliver the reliable, modern rail transit Americans deserve.”

The work stoppage between February 6 and February 22 added “million of dollars in additional costs,” Pat McCoy, Gateway’s chief financial officer, wrote in a court filing. It also temporarily laid off about 1,000 construction workers.

Congress has approved Gateway’s funding, including $11 billion of federal money and $4 billion of loans to be repaid by New York, New Jersey and the Port Authority of New York and New Jersey. Amtrak will contribute another $1 billion.

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