The Gateway Development Commission (GDC), the commission overseeing the construction of the new railroad tunnel between New Jersey and Manhattan, has awarded the contract for Package 1C of the Hudson Tunnel Project, the section that will drill the new tunnels under the Hudson River. The USD 1.29 billion contract was awarded to the Traylor/Walsh/Skanska joint venture, and work is expected to begin in the coming months.
Package 1C covers the longest tunnel-boring section of the entire project. The contractor will construct two new tunnels, each approximately 7,250 feet (about 2.2 kilometers) long, between the access shaft in Weehawken and the one on 12th Avenue in western Manhattan. The drilling will be performed using two new TBMs, designed to operate in the mixed geological conditions beneath the Hudson, including rock, soft soil, and previously stabilized areas.
Other work included in the package
In addition to the actual tunneling, the contract includes:According to the GDC, with this award, six of the ten work packages for the Hudson Tunnel Project are already underway or completed. The Commission also states that, together with packages 1A and 1B, which are already underway, all contracts for drilling and the basic structure of the new tunnels are now awarded or in progress.
- construction of nine cross-passages between the two tubes;
- ground stabilization beneath a section of the Hudson Bergen Light Rail;
- permanent reinforcement of a section of the Willow Avenue Bridge, between Weehawken and Hoboken.
A Key Project on the Northeast Corridor
Hudson Tunnel Project is the centerpiece of the Gateway program, considered by U.S. authorities to be the most urgent rail infrastructure investment in the U.S. The program aims to increase capacity and resilience on the busiest section of the Northeast Corridor, where over 2,200 trains run daily and approximately 800,000 passengers travel.
The stakes are high, as the current tunnels under the Hudson are over a century old and were damaged by Hurricane Sandy. The project involves building two new tunnels and subsequently rehabilitating the existing ones, which are essential for the rail link between New York and New Jersey.
A project plagued by delays and funding battles
The awarding of this contract comes after a new period of political and financial turmoil. In early February 2026, the commission managing the project sued the Trump administration for blocking federal funding, saying the project, estimated at USD 16 billion, risked being halted.
Reuters reported at the time that federal funding had been suspended, and work was set to halt if the funds were not released.
Shortly thereafter, a federal judge ordered the administration to restore funding, and the Associated Press reported that the decision came just as the project was on the verge of being halted. Meanwhile, New York and New Jersey also filed a separate lawsuit against the freezing of funds.
Reuters also reported that the administration had withheld over USD 205 million in reimbursements owed to the project, and the freeze was putting direct pressure on construction sites and the project timeline.
Rising costs compared to previous years
Project costs have also risen over time. In previous years’ Gateway documents, the Hudson Tunnel Project was estimated at USD 11.6 billion in 2020, following an increase of USD 275 million from the previous estimate—a rise attributed at the time to schedule delays and cost escalation.
By 2026, estimates had reached USD 16 billion, a sign of the scale the investment had reached in the meantime.
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