The Federal Transit Administration (FTA), part of the U.S. Department of Transportation, informed the Gateway Development Commission (GDC) that the Hudson River Tunnel project has received approval to enter the Engineering phase of the FTA Capital Investment Grants (CIG) program. 

Once the project begins, it is expected to create more than 72,000 American jobs in the region.

“Every day, 200,000 people pass through the North River Tunnel, and a closure affects not just the entire Northeast Corridor, but the entire country,” said U.S. Transportation Secretary Pete Buttigieg. “Today, we are proud to announce that the Hudson River Tunnel project is entering the Engineering phase, moving us a huge step closer to finally revitalizing and expanding this century-old piece of American infrastructure.” 

Hudson River Tunnel Project Details

The Hudson River Tunnel project is part of the Gateway Program, a series of strategic infrastructure investments designed to improve New York and New Jersey rail service.

The Hudson River Tunnel project is particularly critical because 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 present reliability concerns for more than 200,000 people who travel through the tunnel on more than 400 trains every weekday.

According to a study by the Northeast Corridor Commission, commuters in 2020 were delayed more than 210 hours due to maintenance issues. 

The Hudson River Tunnel project will build a new two-track rail tunnel from the Bergen Palisades in New Jersey to Manhattan, directly serving New York Penn Station and rehabilitating the existing North River Tunnel.

Additionally, nearly 5,000 new affordable housing units will be created in the adjacent Hudson Yards as part of the construction.

The project will improve New Jersey Transit and Amtrak service for a region that impacts more than 20% of the nation’s economy.

“Hundreds of thousands of Americans travel under the Hudson River every day, not just between New York and New Jersey but between points all along the East Coast,” said FTA Administrator Nuria Fernandez. "FTA is proud to invest in the Hudson River Tunnel, through the CIG program, so these rails can continue to carry millions of people and billions of dollars that help define our country’s economy every year.”

Once all financial, technical, and legal requirements are completed, FTA’s anticipated funding commitment to the Hudson River Tunnel project will be $6.88 billion, subject to the annual appropriation of funds by Congress.

The overall project cost is approximately $17.18 billion.

U.S. DOT's Support for Gateway Program

In addition to the Hudson River Tunnel project, U.S. DOT has provided support for the Gateway program including through a CIG grant agreement for Portal North Bridge, a Mega grant for the Hudson Yard Concrete Casing, which will provide the opening of the new Hudson River tunnel on the New York side, and most recently a RAISE grant for Tonnelle Avenue, which will provide the opening of the tunnel on the New Jersey side.

The Hudson River Tunnel project is also under consideration for Federal Railroad Administration grant funds. 

While moving into the Engineering phase means the Hudson River Tunnel project is one step closer to accessing billions of dollars in anticipated federal funding, this step also allows GDC to incur costs for engineering activities, demolition, utility relocation, property acquisition, and other non-construction costs, including procurement of specialized equipment and materials.

The CIG program is a multi-step, multi-year funding opportunity to help communities carry out transformational transit projects nationwide. More than five dozen potential projects are currently in various phases of the CIG “pipeline,” covering 23 states and every time zone.

The program received a significant authorization boost thanks to President Biden’s Bipartisan Infrastructure Law – up to $23 billion over five years to invest in new high-capacity transit projects.