Construction on the $16 billion Hudson Tunnel project has resumed, but officials warn that work could be halted again in two to three months if federal funding disbursements remain uncertain.
Officials confirmed on March 10 that workers have returned to construction sites in New Jersey, Manhattan and the Hudson River, where contractors had suspended activity during the funding outage. Construction was idled in late January after the US Department of Transportation halted federal reimbursements tied to the project’s grant and loan agreements.
Federal disbursements had been suspended since Sept. 30, 2025, after the Trump administration halted reimbursements under the project’s grant agreements, prompting litigation by the Gateway Development Commission and the states of New York and New Jersey seeking resumption of contractually obligated funds.
Arrears totaling more than $205 million were released after a court order by U.S. District Court Judge Jeannette A. Vargas, who on Feb. 9 ordered USDOT to restore funding streams under the project’s grant agreements, although the administration’s appeal remains pending in the U.S. Court of Appeals for the Second Circuit.
“The Trump Administration’s decision to appeal and fight its ability to reinstate its illegal funding freeze is wrong in law and harmful to New Jersey and New York, our residents and workers on this critical project,” New Jersey. Attorney General Jennifer Davenport said in a statement on March 3.
Project officials warned the public during the January work stoppage that prolonged funding disruptions could jeopardize nearly 1,000 construction jobs in the short term and as many as 11,000 jobs over the life of the project.
Gateway Development Commission CEO Tom Prendergast said the restart will allow crews to continue moving forward on initial tunneling work as the agency seeks consistent access to federal funds already committed to the project.
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“Our workers are back and we are moving full steam ahead on all of our construction jobs, but we will have no choice but to stop work again if the federal government does not continue to disburse the funds that are committed to the project,” Prendergast said in a March 10 statement.
Two major contracts still awaiting federal funding certainty include the central segment of the Hudson River Tunnel and the New Jersey Surface Alignment, which will build surface and elevated tracks connecting the new tunnel to New Jersey’s Northeast Corridor.
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Construction progress is progressing toward tunnel boring
The Hudson Tunnel project is the centerpiece of the Gateway program, which aims to expand rail capacity between Newark, NJ and New York’s Penn Station.
Crews work inside the Hudson County access shaft in Weehawken, NJ, part of the $16 million Hudson Tunnel project, where excavation and soil stabilization are progressing ahead of tunnel boring operations.
Courtesy of Gateway Development Commission
Gateway officials said several construction milestones have been reached as crews prepare for tunnel boring. Components of the first TBM to excavate the Palisades Tunnel segment have arrived at the portal site in North Bergen, NJ. A second tuner from German manufacturer Herrenknecht AG has been dispatched and is expected to arrive on site this month.
Contractors have also completed installation of the slurry wall for the Hudson County access well in Weehawken, creating a watertight perimeter for the underground excavation that will begin this spring. Crews recently began installing pipes and building an overwater platform to support ground freezing operations near the Manhattan bulkhead, a technique used to stabilize soils prior to tunnel excavation.
Work has also resumed inside a cofferdam on the Hudson River, where crews are using deep soil mixing to reinforce the sediment ahead of tunnel boring operations.
On the Manhattan side, contractors recently completed placement of the inverted slab for the Hudson Yards Concrete Shell Section 3 tunnel box. More than 11,000 cubic meters of concrete have been placed so far, with wall construction underway.
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The big contracts are progressing in sections of the tunnel
In February 2025, the Gateway Development Commission awarded a $1.2 billion design-build contract for the Manhattan Tunnel Project to a joint venture of Frontier-Kemper Constructors Inc. and Tutor Perini Corp.
Excavation is progressing in North Bergen, NJ, the portal site of the Hudson Tunnel Project, where crews are preparing the launch area for TBMs that will begin excavating the Palisades Tunnel segment.
Courtesy of Gateway Development Commission
The work includes the construction of twin tunnels connecting the future Hudson River crossing with the Hudson Yards shell and the construction of a permanent ventilation shaft on 12th Avenue.
On the New Jersey side, the commission previously awarded a $465.6 million contract to Schiavone Dragados Lane JV to build the Palisades Tunnel segment. The work includes boring two tunnels about 5,100 feet long with a 25-foot, 2-in. in diameter, along with six cross passages and a Hoboken shaft for the recovery of tunas.
Riverbed stabilization work is also underway where the new tunnel alignment will pass beneath shallow Hudson River sediments, with crews injecting grout to strengthen the soils prior to tunneling operations.
The Hudson Tunnel project will build a new two-track rail tunnel under the Hudson River while allowing the existing North River Tunnel, which opened in 1910 and was damaged by salt water intrusion during Superstorm Sandy, to undergo a complete rehabilitation once the new crossing goes into service.
The corridor is the nation’s busiest passenger rail line, hosting more than 2,200 trains and approximately 800,000 passenger trips daily.
The new tunnels are expected to enter service by 2035, after which the existing century-old North River Tunnel will be sequentially decommissioned for rehabilitation.
