Federal funding for the $16 billion Hudson Tunnel project will run out within days unless payments resume, forcing contractors to begin shutting down work in New York, New Jersey and the Hudson River, the Gateway Development Commission said Jan. 27.
The commission warned that active construction will begin to end immediately and could come to a complete halt on February 6, putting one of the country’s most critical rail megaprojects on hold just as it was preparing to move to full tunnel excavation.
“We have exhausted all available options to keep construction moving,” GDC CEO Thomas Prendergast said in a statement. “Without the federal funding that was promised and contractually committed, we will be forced to stop work on this project, at a significant cost to taxpayers and workers.”
The first civilian packages of the program had been progressing towards tunneling. The Gateway project photo gallery shows TBM components completed at the Tonnelle Avenue site in North Bergen, NJ, portal and launch box construction underway at the New Jersey Tunnel entrance, slurry wall installation progressing in access shafts on both sides of the river, and soil stabilization continuing within the Hudson River itself.
On the Manhattan side, the images show an opening cut into the bulkhead at the west end of the Hudson Yards-Section 3 concrete casing, which physically links the new trench work to previously completed casing segments that will feed into the bored tunnel sections.
RELATED
Trump says $16 million Hudson Gateway tunnel project ‘done’
These items now face suspension.
The project aims to replace the 116-year-old North River Tunnel, which was heavily damaged during Superstorm Sandy and carries Amtrak and NJ Transit trains under the Hudson River. GDC officials have warned that failure of the existing tunnel could cut off the Northeast Corridor.
An aerial view shows construction of a bridge and excavation adjacent to the Tonnelle Avenue site in North Bergen, NJ, where work is underway to create access for TBM components for the Hudson Tunnel Project.
Photo courtesy of the Gateway Development Commission
About 70 percent of the project’s $16 billion cost, roughly $12 billion, was to be covered by federal grants, with the rest financed through loans repaid by New York, New Jersey and the Port Authority of New York and New Jersey. GDC said federal disbursements for both the grant and loan programs have been halted since Oct. 1, 2025.
The pause was initially tied to a Federal Transit Administration review of the commission’s disadvantaged business program before expanding to cover all federal funding streams that support the project, according to GDC.
Rep. Josh Gottheimer (D-NJ), whose district includes thousands of daily rail commuters, said the freeze now threatens work that’s already underway.
“This tunnel is currently under construction, with workers on site and contracts in place,” Gottheimer said in a statement released by his office. “If the Trump administration doesn’t release the funds it already approved, construction will grind to a halt, jobs will be lost and costs will skyrocket.”
RELATED
Feds freeze $18 million for New York subway and Hudson tunnel projects
GDC said more than $1 billion has already been spent on construction and warned that a prolonged pause would increase restart costs while putting thousands of construction jobs at risk.
Carlo A. Scissura, president and CEO of the New York Building Congress, called the potential shutdown “a four-alarm fire,” warning that a break would put nearly 1,000 union workers out of business and waste more than $1 billion that has already been invested in a project he said is “fully approved, fully obligated, and underway.”
The White House has disputed responsibility for the impasse. According to The Wall Street Journal, a White House spokesman said Senate Democrats are blocking a broader deal needed to move the project forward.
New Jersey officials countered that the funding freeze is an administration action; Reuters reported that state lawmakers warned that the shutdown would leave roughly 1,000 workers out of work in the short term.
ENR reached out to the offices of House Minority Leader Hakeem Jeffries (D-NY) and Senate Minority Leader Chuck Schumer (D-NY) for comment on the funding freeze. None of the offices answered.
The commission also said the pause is delaying the procurement of four remaining major construction packages, including two scheduled to begin in 2026, covering the Hudson River Tunnel and the New Jersey Surface Alignment.
“It’s not just about a break,” Prendergast said. “Every day of delay increases costs, increases risk and brings us closer to failure of the infrastructure that the entire country depends on.”
