Money Flowing Again For Train Tunnel Between NJ, NY After Federal Funding Standoff

They’re back on the job.

On Tuesday, the Gateway Development Commission announced that construction on the $16 billion Hudson Tunnel Project will restart this week – restoring nearly 1,000 jobs that had been put on ice due to a funding standoff with the federal government.

The Trump administration froze billions of dollars for the long-awaited, new train tunnel between New Jersey and New York in October 2025. White House budget director Russell Vough said the funding for the Gateway Tunnel was being put on hold to ensure that it is not flowing based on “unconstitutional DEI principles” – a stance that has been a hallmark of the administration of President Donald Trump.

>> READ MORE: Feds Freeze Gateway Tunnel Funds Over DEI, Gov’t Shutdown

The Gateway Development Commission – a bi-state public authority overseeing the project – eventually launched a lawsuit to compel the Trump administration to release the money. The states of New Jersey and New York filed a separate lawsuit demanding the same.

Earlier this month, a federal judge ordered the Trump administration to unfreeze funding for the tunnel. The decision was expected to allow work to resume at the site. However, construction remained paused while an appeal was filed – with layoff notices issued to nearly 1,000 construction workers. Related: Fed-Up NJ Construction Workers Rally Over Stalled Train Tunnel: ‘It Sucks’

On Feb. 12, a judicial order took effect, requiring the federal government to release funds for the project after a federal appeals court declined to overrule the lower court’s decision. Related: Gateway Tunnel Construction Set To Resume After Feds Release Funds

TUNNEL UPDATES

On Tuesday, the Gateway Development Commission (GDC) said the restart of construction is “great news” for the workers, as well as the hundreds of thousands of riders who take the train between New Jersey and New York City every day.

“In recent weeks, we have seen a massive surge of support for the Hudson Tunnel Project,” New Jersey GDC commissioner and co-chair Balpreet Grewal-Virk said.

“We are incredibly thankful for Gov. Mikie Sherrill, New Jersey’s congressional delegation, and the many other leaders who have called on the administration to stop delaying the most urgent infrastructure project in the country,” Grewal-Virk added. “We’re seeing the results of this effort now, as hundreds of workers go back to our construction sites.”

The latest wave of construction work is being funded with nearly $235 million that the Gateway Development Commission received from the federal government earlier this month.

Here’s what is planned next, the commission reported:

• Continuing excavation of the tunnel boring machine (TBM) launch box at the portal to the new tunnel
• Preparing to assemble the components of the first TBM on site in North Bergen
• Coordinating the delivery of the second TBM, which is ready for shipment from the manufacturing facility
• Continuing slurry wall installation for the 12th Avenue Access Shaft and beginning excavation of the Hudson County Access Shaft
• Constructing a marine platform for work associated with the Manhattan Tunnel
• Continuing ground stabilization in the Hudson River
• Conducting site clearing work to prepare for the New Jersey Surface Alignment Project

While work on GDC’s active construction projects resumes, two major procurements for work on the Hudson River Tunnel and New Jersey Surface Alignment contracts will remain on hold until the agency regains access to all $15 billion in federal grants and loans that has been paused since Oct. 1, 2025.

Both of these contracts were scheduled for award in late 2025 or early 2026, the commission said (article continues below).

BUILDING A TUNNEL

The massive construction project is the centerpiece of a larger effort dubbed the Gateway Program, which aims to take some pressure off one of the most notorious railway chokeholds in the nation: the Northeast Corridor.

The Gateway Program was greenlighted during the administration of former President Barack Obama. It hit a brick wall when Trump took office for his first term, but picked up steam again when Joe Biden entered the White House.

The $16 billion cost of the project is being split between the federal government and the project’s three local partners: New York, New Jersey, and the Port Authority of New York and New Jersey.

The new tunnel is especially crucial to the region, as the existing North River Tunnel serving Penn Station is more than 110-years-old and was severely damaged during Superstorm Sandy in 2012. While the tunnel has been repaired frequently, its age and damaged condition have caused constant headaches for more than 200,000 people who travel through the tunnel on more than 400 trains every weekday.

Construction on the new tunnel started on both sides of the Hudson River in November 2023. It will serve NJ Transit and Amtrak trains. Learn more about the plans here.

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