Long-Awaited Hudson Tunnels Could Take Longer, Cost $2B More

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The New York area’s long-awaited Gateway tunnel project had its cost increase again, this time by $2 billion, while construction was delayed by a year, according to a new estimate from its overseer.

The Gateway Development Commission (GDC), the group tasked with shepherding the project to build and renovate train tunnels beneath the Hudson River, announced Wednesday that it’s looking for additional federal funding after the estimated cost for the project increased from $14.1 billion to $16.1 billion. The commission blamed inflation for the higher bill.

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GDC also said that the construction start for the project — which calls for rehabilitating a Hurricane Sandy-damaged tunnel that connects New Jersey to Penn Station and building a new one —  would be pushed back from 2023 to 2024. The new tunnel is now expected to come online in 2035 and all work to finish by 2038.

“The cost and schedule for the Hudson Tunnel Project must be based on the reality of the economic environment and consistent with the methodology and requirements for receiving federal funding,” Alicia Glen, co-chair of the GDC, said in a statement. “We are committed to working to mitigate costs by positioning the project to receive increased federal sources, and using innovative contracting and financing approaches to keep schedules and costs in line and get this project built.”

However, GDC officials said the project cost could come in at $14.7 billion if it receives a greater amount of federal grants.

News of the higher price tag comes a year after that the Gateway tunnel’s budget increased by 6 percent and months after New York and New Jersey finalized the first phase of state funding for the project, agreeing to split costs 50-50. The Federal Transit Administration is expected to shoulder 60 percent of the costs.

The project has been in the works for nearly a decade and seemed on track after then-New Jersey Gov. Chris Christie and then-New York Gov. Andrew Cuomo struck a funding deal in 2017, but it was delayed by the Trump administration. It got picked back up once “Amtrak” Joe Biden took office.

Work also calls for replacing the Portal North Bridge between Secaucus and Kearny, N.J. The improved and new Hudson tunnels are expected to improve rail speed and capacity between the two states.

Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.