This audio is automatically generated. Please let us know if you have any comments.
Contractors on the ground will have to wait until at least Thursday to see if the funding tap is turned back on for the $16 billion Hudson Tunnel project.
A federal judge in New York on February 6 ordered the US Department of Transportation resume federal funding for infrastructure work, currently the largest in the country. However, the administration of President Donald Trump filed an appeal contesting the February 8 decision. A judge on Monday gave the government up to Thursday to resume funding since the appeal is progressing through the courts, according to the Plaça del Centre.
Meanwhile, nearly 1,000 workers have been laid off, according to the Gateway Development Commission, which oversees the project. But other workers must continue on the job, the GDC said in a lawsuit filed to recover the funding, as the currently unfinished jobsites have massive holes in the ground that cannot be left as they are.
To cover those holes, the GDC said it would have to spend an additional $15 million to $20 million a month on patch work. These suspension costs would also be used to demobilize work crews, manage, secure and secure various construction sites, as well as remove and store heavy equipment.
The funding threats began last fall, when the Trump administration questioned the legality of the Transportation Department Disadvantaged companies program. As a federally funded construction, Gateway had met federal DBE requirements for workforce participation goals for women, minorities, and veterans. General contractor Tutor Perini said at the time progress continued as planned.
For four months, construction continued after the administration signed up to finance the project, due to the use of reserves and a line of credit from the GDC. But by the end of January, those resources had dwindled and it was no longer feasible to continue funding the project, according to the GDC.
Green light, red light in financing
Without the federal funds, the Gateway Development Commission stopped all construction progress on February 6. The GDC has also put four more important pending acquisitions.
The GDC presented a lawsuit against the Trump administration on February 2 for breach of contract. The states of New York and New Jersey also introduced a separate lawsuit against the administration same week
Now, the commission and its workers are waiting to know if they will be able to return to work. After the February 6 order directed the government to resume funding, GDC told Construction Dive, “We hope this means funding disbursements will resume soon and we can begin site operations and get our workers back to work.”
Federal grants account for approximately $12 billion of the project’s budget, or about 70 percent. Guardian Perini, based in Los Angeles, declined to comment for this article. GDC blamed the shutdown squarely on the federal government.
“On September 30, 2025, DOT placed the future of this major public works project in serious doubt by suspending the release of funds it was contractually obligated to pay to GDC under a set of binding grant and loan agreements,” the GDC wrote in its lawsuit. “Since that date, DOT has withheld a total of $205,275,358 in payments owed to GDC under the HTP grant and loan agreements.”
Project stakeholders expected 2026 to be full of milestones for the Hudson Tunnel Project, said Balpreet Grewal-Virk, New Jersey commissioner and co-chair of the Gateway Development Commission. The plans included the award of two major construction contracts and the creation of tens of thousands of jobs. Contractors also hoped to begin drilling the tunnel in New Jersey later this year, he added.
“In the coming days and weeks, GDC will continue to do everything possible to restore funding so that the many hardworking men and women employed by the Hudson Tunnel project can return to work, and we can once again celebrate milestones on the way to delivering this urgently needed new tunnel,” Grewal-Virk said.
