Gateway tunnel costs climb nearly 6% since last year

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The costs for the proposed Gateway tunnel under the Hudson River have climbed 5.6% since 2020, after being stalled by the Trump administration for four years.

A plan submitted Aug. 27 to President Joe Biden’s Federal Transit Administration by the Gateway Development Corp., which is overseeing the tunnels’ construction, noted a $700 million year-over-year increase in the costs of the project, from $11.6 billion in 2020 to $12.3 billion now.

The tunnels are over a century old and in dire need of repair. Current plans call for the construction of two new tubes, after which the existing pair would be repaired.

Under the revised estimates, the new tunnels would cost $10.1 billion while the repairs would cost $2.2 billion. “Major construction” would start in two years in August 2023, according to the GDC.

State officials and economists warn that for even a single tunnel to go offline – should it need emergency repairs – would wield a devastating blow to the New York City economy, a vital center of commerce for the nation.

“The Hudson Tunnel Project is of the utmost importance to the economic well-being of New Jersey, our region, and our country,” reads an Aug. 27 statement from Gov. Phil Murphy.

New York and New Jersey are slated to split the local-side $6.1 billion costs of the project down the middle, according to GDC’s seven-page financial plan. Amtrak would chip in nearly $1.4 billion, while the FTA would pay $5.6 billion, or roughly 44% of the tab.

Under Biden, the White House has shown increasing willingness to put up money for the project, and Transportation Secretary Pete Buttigieg has made multiple trips to the New York City area to tout the tunnels as key infrastructure projects.

Should an infrastructure package finally make its way through Congress and onto Biden’s desk, it could include vast sums of money for Amtrak, which owns the Northeast Corridor rail line that travels through the tunnel.

Running between Boston and Washington, D.C., the NEC marks one of the world’s most heavily traveled passenger rail lines.

GDC estimated that in pre-pandemic times, upwards of 200,000 Amtrak and New Jersey Transit riders traveled through the tunnel on a daily basis.

Stalled starts

Citing potential cost overruns, former Gov. Chris Christie in 2010 nixed the previous replacements planned for the tunnel, called ARC.

Once completed, these tunnels are expected to reduce bottleneck congestion and delays and remove a key infrastructure vulnerability.

The federal government blocked numerous aspects of the plans under former President Donald Trump, including the environmental review process and key federal dollars promised during the Obama administration.

Numerous media reports sourced the opposition back to political arm-twisting of now-Senate Majority Leader Chuck Schumer, a Democrat and key political adversary of Trump.

Tony Coscia, chairman of Amtrak, said there’s been a significant difference” between the attitudes seen under Trump, versus the Biden administration.

“We’ve had lots of interactions with the new administration … and all have been very receptive toward working with us on the Gateway program,” Coscia said in an April interview. “There is a clear recognition of the importance of the project and a willingness to be very engaged.”

The Biden administration approved the environmental impact statement in May, even though the decision was due in March 2018.

Next, the FTA would need to rate the tunnel as eligible for federal funding, which GDC officials contend is likely under the new financial plan submitted last Friday.

“The impact of this corridor if there was a loss of service, if one of these tunnels were to go out of service, you would be feeling the economic impact all the way back in Indiana,” Buttigieg said during a press conference in late June at Penn Station New York in Manhattan.