If you’ve been paying attention to NJBIZ headlines in recent months, you know that the long-stalled, once-left-for-dead Hudson Tunnel Project is seriously gaining steam.

After years of starts and stops, a lack of funding and support as well as other obstacles, the project that will bring two new, 4.5-mile-long tubes – and the rehabilitation of the 113-year-old existing North River Tunnel connecting New Jersey and New York along with the rest of the Northeast Corridor rail line – is transitioning from pipedream to reality.

Last month, NJBIZ reported on some of those developments, including federal officials informing the project’s sponsor, Gateway Development Commission (GDC), that the work had received approval to enter the engineering phase of the Federal Transit Administration Capital Investment Grants Program. That sets the stage for the project to receive an up to $6.88 billion CIG Program grant — the largest federal grant awarded to a mass-transit project.

Just over a year ago, Kris Kolluri, No. 1 on this year’s NJBIZ Power 100, was tapped as the first chief executive officer of the GDC, which is singularly responsible for overseeing the development and completion of the effort that is regarded as the most urgent infrastructure project in the country.

In a letter to GDC commissioners penned last month that was shared with NJBIZ, Kolluri reflected on his first year in the job and on the progress being made on this historic project.

“The team feels proud, as do I, of our results in the last twelve months, and we continue to build an organization with the technical, financial, and legal capabilities to deliver this project,” Kolluri wrote. “I have never seen a group work together so hard, so seamlessly, and with such dogged determination. As you have witnessed, we set and met every one of our aggressive goals. Most importantly, we fully expect that construction will start on projects in both New York and New Jersey this year, with major construction beginning in 2024.”

Digging in

Thanking leaders from both states and at the federal level, as well as dedicated stakeholders for their support, Kolluri noted that the road ahead will be hard.

“There is a reason why a new heavy rail tunnel beneath the Hudson River has not been constructed in over a century. It is a complex, costly, and time-consuming undertaking that requires coordination and cooperation at all levels, including federal, state and local government,” said Kolluri. “But our work is worth it, no matter the challenges: the new tunnel is as important to the 21st Century as the current North River Tunnel was to the last. Notably, the project will finally resolve the threat of a single point of failure that the current tunnels pose, the effect of which would be catastrophic to the regional and national economies.”

Kolluri said that despite the complexities and the cost – the anticipated price tag is $17 billion in total – that the project is beneficial because of the tens of thousands of jobs and multiple billions of dollars in economic activity that will be created.

He also added that it was worth it for the millions of tons of carbon dioxide it will keep out of an already overheated climate.

“Working together, I am confident we will meet the challenge of replacing failing infrastructure with a transformative and modern transportation project that will be the backbone of this region and this nation for the next century,” said Kolluri.

The letter noted some funding highlights from the last year (in addition to the $6.88 billion grant), which NJBIZ has reported on, including

• a $292 million Mega Grant from the U.S. Department of Transportation that was announced by President Joseph Biden earlier this year;
• a $25 million RAISE Grant for the Tonnelle Avenue Bridge and Utility Relocation project; and
• the application for $3.8 billion in grants through the Federal Railroad Administration’s Federal-Partnership Grant Program, as well as making meaningful progress toward RRIF Loans.

[T]he new tunnel is as important to the 21st Century as the current North River Tunnel was to the last.

Kolluri also laid out some next steps, as the project has advanced design, received funding, and is about to start construction. Some of those include:

• Hudson Yards Concrete Casing Section 3 – The GDC board provided authorization for a Supporting and Executing Partner (SEP) Agreement between Amtrak and GDC for the approval of the Market Case Estimate, and for Funding Agreements with New York and New Jersey. This will be the first component to start construction as early as this summer.
• Tonnelle Avenue – The GDC launched two procurements to build this phase of the project: Construction and Construction Management Services, with substantial DBE (Disadvantaged Business Enterprise) Commitments of 18% and 25%, respectively. Construction is expected to begin later this year.
• GDC launched additional procurements, including publishing the Request for Qualifications for the Hudson River Ground Stabilization and Palisades Tunnel procurements. The Request For Proposals are expected this fall and construction is slated to start as early as next year.
• GDC has shortlisted three joint ventures to provide Delivery Partner services and plans to issue RFPs later this year, with an award expected in early 2024.

Internal infrastructure

In addition to those major advances, GDC has worked to implement a strong governance framework to give confidence to federal funding partners and contractors that the organization is well positioned to deliver on such a complex project. Those efforts have included the passing and adoption of the Project Development Agreement (PDA), the roadmap for partner roles and responsibilities; as well as securing local, non-federal funding from both states and the Port Authority of New York & New Jersey.

Kolluri said that industry outreach has been vital to take these next steps, especially since the organization he runs is a relatively new one. Throughout the year, GDC has been hosting industry outreach, networking, virtual, and other assorted events to engage with different stakeholders.

Finally, the CEO noted that a crucial component to obtaining a Full Funding Grant Agreement is to demonstrate to the FTA its legal, financial and technical capabilities to oversee and implement this incredibly complex project.

Those steps have included the GDC board voting to become the project sponsor last September – transferring the role from the Port Authority; hiring key staff members to meet the necessary requirements of the FTA; developing and implementing its first operating budget; and executing funding agreements with Amtrak and New Jersey and New York.

“The year ahead is full of opportunities and challenges,” Kolluri wrote. “Our focus remains on cost and schedule. Even as we seek to obtain a Full Funding Grant Agreement, we will advance construction on important components of the project, procure future tunnel construction contracts, complete our eligibility to become an FTA grant recipient and finalize our funding, and be invited to apply for a RRIF loan. I believe in the organization and team being assembled. With your continued help and guidance, we will build this vital project.”

Learn more:

GDC has released a video laying out the overview and key details of the project: