The Gateway Development Commission (GDC) announced Monday it executed a $3.8 billion federal grant agreement for the Hudson Tunnel Project (HTP). The move clears GDC to receive an initial $1.9 billion.

The $3.8 billion Federal-State Partnership (FSP) Grant with the Federal Railroad Administration (FRA) completes the $12 billion federal contribution for the HTP. Representing the largest federal funding committing for a rail project in modern history, the contribution covers 70% of the project’s cost. That figure comes in notably higher than the original plan for federal and local partners to split costs 50-50.

Combined with $800 million in New Starts Capital Investment Grant (CIG) Program funding already obligated, GDC now has $2.7 billion in grant funds immediately available for the project construction. The HTP’s local share also has $4 billion available to advance construction, which is currently underway on both sides of the Hudson River, as NJBIZ has reported.

“The HTP is already starting to bring huge economic benefits to the Northeast and the nation as a whole, starting with the jobs and economic activity resulting from GDC’s direct spending during construction,” said Alicia Glen, New York GDC commissioner and co-chair; Balpreet Grewal-Virk, New Jersey GDC commissioner and co-chair; and Tony Coscia, GDC Amtrak commissioner and vice chair, in a joint statement.

“While we have had the full funding for the HTP committed for months, today we received one of the first major infusions of funds that enables us to turn these commitments into reality. With nearly $3 billion in the bank, the full economic impact of this massive project is beginning to be felt,” the statement added.

Forward momentum

“The entire $16 billion funding commitment we need to complete the HTP has been secure since GDC signed our Full Funding Grant Agreement this summer,” said GDC Chief Executive Officer Kris Kolluri, who will depart the organization next month. “With this dramatic infusion of immediately available cash, GDC is well-prepared to execute the next phase of major construction and continue moving forward with confidence as we ramp up and prepare to begin tunnel boring activity next year.”

FRA Administrator Amit Bose said the Bipartisan Infrastructure Law is advancing a number of significant infrastructure projects as well as investing billions of dollars in the Northeast Corridor. Upgrades to aging infrastructure will allow for higher speeds, shorter travel time and greater reliability for a growing number of riders, he said.

“And this month’s finalized funding agreement on the Hudson Tunnel Project is another sign of progress,” said Bose. “These improvements will be felt in New York, New Jersey, and beyond while creating jobs and growing the economy. FRA appreciates the partnerships and planning that are critical to making progress on the Hudson Tunnel Project and other Gateway Program projects possible, and we look forward to our work together.”

Good news

Lawmakers, project stakeholders and advocates applauded the news.

“Today’s Hudson Tunnel Project announcement is another critical step toward modernizing our rail and transit infrastructure,” said U.S. Sen. Cory Booker, a Democrat. “I applaud the Biden Administration’s support and commitment of a 70 percent federal share for this project. This funding will help us alleviate congestion and improve rail services for passengers throughout the entire Northeast Corridor and the tens of thousands of New Jersey commuters who rely on this infrastructure every day.”

“Congratulations to Gateway CEO Kris Kolluri on his successful strategy to obtain unprecedented funding for this project,” said Jerry Keenan, president of the New Jersey Alliance for Action. “The Alliance for Action is confident that the construction and execution of the Gateway Project will be equally successful. It’ll bring new jobs and incredible economic impact. This is a significant milestone for the most important infrastructure project in our country – bar none!”

“Today is not just a construction funding announcement; today is a bold statement about our regional values through significant investment in the future,” said Greg Lalevee, business manager of Operating Engineers Local 825. “Full Funding agreement means more than just numbers on a spreadsheet – it means work-force game-changer, economic investment and a much needed modernization of a critical transportation corridor. Everyone benefits from this announcement today and we are proud to be part of that effort.”