NEW YORK — Construction of the Hudson River Tunnel project on the Northeast Corridor is on the verge of halting because of the withholding of federal funds, the agency overseeing the project said on Tuesday, Jan. 27.
Funding for the $16 billion project to build a new two-track tunnel between New Jersey and New York’s Penn Station will run out on Friday, Feb. 6, the Gateway Development Commission said in a press release. At that point, contractors will spend two weeks winding down work at construction sites in the river and on both sides; the project will then halt until funding becomes available.
Federal money, which accounts for 70% of the project’s cost, has not been distributed since the October shutdown of the federal government. Since then, the Department of Transportation said funding would remain suspended until construction contracts could be reviewed for compliance with Trump administration policies regarding rules about businesses owned by women and minorities. A January 2025 executive order ended rules reserving a percentage of federal contracts for such businesses.
“The progress we have made since the project started construction would not have been possible without the support of the federal administration,” Thomas Prendergast, CEO of the Gateway commission, said in a press release following the commission’s Tuesday meeting. “Since federal funding was paused in October, we have done everything in our power to keep construction moving forward as planned, but we cannot fund this work on credit indefinitely. Pausing construction is the absolute last resort, and we will continue working around the clock to secure funding so that the workers who are counting on this project to pay their bills can stay on the job and we can continue delivering the reliable, 21st-century infrastructure America needs.”
About 1,000 workers will lose their jobs if the project shuts down, the commission said. It also notes a stop to construction will increase the risk that the 116-year-old North River Tunnel — actually a pair of single-track tunnels beneath the Hudson — could fail before the new tunnel can be completed. Those tunnels were damaged by flooding during Hurricane Sandy in 2012; a failure of one tube could lead to a 75% reduction in train traffic on the corridor. The full project calls for restoration of the existing tubes when the new project is completed, increasing NEC capacity.
U.S. Sen. Chuck Schumer (D-N.Y.) met with President Donald Trump earlier this month to urge that funding be released, the New York Times reports; Trump responded with a social media post saying Schumer was delaying the project. And while the funding was paused over contracts, a statement Tuesday from White House spokesman Kush Desai indicated it is now caught up in the dispute over immigration policies. “It is Chuck Schumer and Democrats who are standing in the way of a deal for the Gateway tunnel project by refusing to negotiate with the Trump Administration,” Desai wrote. “There is nothing stopping Democrats from prioritizing the interests of Americans over illegal aliens and getting this project back on track.”
Schumer said during the commission’s meeting Tuesday that the claim “makes absolutely no sense. … There is only one person who terminated Gateway and only one person who can get it back on track.”
Trump said in October that the project was “terminated” as part of an effort targeting projects supported by Democrats during the federal shutdown [see “Trump suggests Gateway …,” Trains.com, Oct. 16, 2025].
The news site Gothamist reports that Prendergast said any shutdown would take a toll on the project.
“If you suspend a job and have to close it down and secure it to start it up,” he said, “you not only lose time, but you are spending money on things you didn’t anticipate to spend money on.”
A halt would come as the project, which has been working for more than a year on approaches to the tunnel, is close to the start of actual tunneling. One of two tunnel boring machines has arrived in New Jersey and the other is to be shipped next month.
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