Gateway Project – It's an Issue of Funding


If Christie and Cuomo have their way, federal support for the new Hudson River tunnel won’t end at grants. The U.S. Transportation Department runs the Railroad Rehabilitation & Improvement Financing program, which has up to $35 billion in lending authority and offers low-interest loans with long repayment periods and a six-year grace period before repayment begins, according to the DOT.

Under those terms, New Jersey could borrow $3 billion at 2 percent interest, for example, and wind up paying $145 million a year for a new tunnel to Manhattan that supports more than $50 billion a year in income for New Jersey residents, according to an analysis by Democratic leaders in the Legislature. “Both governors should be congratulated for getting together,” said New Jersey Senate President Stephen Sweeney, a Democrat, said of Cuomo, a Democrat, and Christie, a Republican.

“I’m glad Governor Cuomo came around to realizing it’s as important for his state as it is for ours.” Both governors have joined a chorus of voices calling for fast action on a new tunnel. The existing tunnel is 106 years old and was already reaching the end of its useful life when it was flooded by Superstorm Sandy in 2012. The flood waters left behind a residue of salt and chemicals that continues to erode the tunnel’s concrete walls, and signal and electrical systems, said officials at Amtrak, which owns the tunnel.

The Gateway proposal is expected to cost $20 billion, which governors Christie and Cuomo said in their letter is significantly more than the $4 billion being spent to build a new Tappan Zee Bridge, a project the governors noted was made possible with Obama’s assistance.

That deterioration will force Amtrak to close one tube of the tunnel within the next 19 years for a three-year project to largely rebuild both tubes. If that shutdown happens before a new tunnel is built, the maximum number of trains using the tunnel will drop from 24 per hour during peak times to six, crippling the region’s transportation network, Amtrak leaders and elected officials have said.

To get work moving quickly, the governors proposed moving leadership of the project from Amtrak to the Port Authority, which is in a better financial position than Amtrak, a for-profit corporation chartered by the federal government that lost $227 million in 2014. They also asked for the Obama administration’s help in speeding up the environmental and planning processes, which on a project of this size can last years. “This is a tunnel that has been discussed for many, many years,” Cuomo said. “This is a situation that is now critical for New York and New Jersey.”

In the letter, the governors also said that New Jersey will make available all of the planning work that was completed during the failed Access to the Regional’s Core tunnel, which Christie canceled during his first year in office citing projected cost overruns he said New Jersey would have been solely responsible for. That project, also known as the ARC tunnel, would have doubled rail service between the two states once it was completed in 2018. Before the project was halted, $1.2 billion in state, federal and Port Authority funds had been spent on it.

Since the cancellation of ARC, Amtrak has proposed the Gateway tunnel project, which would carry commuter trains under the Hudson River to a new train station, which would be built next to Penn Station. The proposal also calls for a new rail yard in New Jersey and new tracks between Newark and New York Penn Station.

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