The Gateway Development Commission (GDC) has said construction of the Hudson Tunnel Project will be paused if federal funding disbursements do not resume in the coming days.
The company has informed contractors that funds for current construction will be exhausted by 6 February. Contractors will spend the next two weeks winding down activity at sites in New York, New Jersey and the Hudson River. Construction would then stop until further funding becomes available.
Hudson Tunnel Project
© Gateway Development Commission
The funding pause also affects four major procurement packages that make up the remaining construction work on the new tunnel. Two packages — the Hudson River Tunnel Project and the New Jersey Surface Alignment Project — are scheduled to begin in 2026, but contracts cannot be awarded while federal funding remains suspended.
Gateway Development Commission CEO Thomas Prendergast said:
Over the past two years, GDC, together with our federal and state partners, have made significant progress building the most urgent passenger rail infrastructure project in the country. The progress we have made since the project started construction would not have been possible without the support of the federal Administration. 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.
Around 70 percent of the Hudson Tunnel Project’s estimated 16 billion USD budget, about 12 billion USD, is expected to come from federal grants. The remaining 4 billion USD is funded through loans from the US Department of Transportation’s Build America Bureau, to be repaid by New York and New Jersey and the Port Authority of New York and New Jersey. Disbursements from all funding sources have been halted since 1 October.
GDC said it has executed funding agreements with all project funders, including the US Department of Transportation, the Federal Transit Administration (FTA) and the Federal Railroad Administration. A total of 4.38 billion USD in federal funding has been formally obligated to the project.
On 30 September 2025, the FTA notified GDC that payments under the Capital Investment Grants programme would be paused while the commission’s Disadvantaged Business Enterprise programme was reviewed. The following day, all federal funding for the project was suspended.
Despite the funding pause, construction has continued. Since October, GDC has procured two tunnel boring machines, completed the Tonnelle Avenue bridge, advanced work on the New Jersey portal launch box, carried out major concrete pours at the Hudson Yards Concrete Casing, and continued ground and slurry wall works in the Hudson River and at access shafts in New Jersey and Manhattan.
More than 1 billion USD in public funds has been spent on construction so far. GDC said it has now drawn down nearly all available funding sources and credit and cannot continue construction without renewed access to project funds.
If construction is paused, nearly 1,000 jobs would be lost immediately, according to the commission. A longer stoppage could affect around 11,000 construction jobs currently associated with the project and reduce anticipated economic activity linked to the works.
GDC also warned that further delays increase the risk of disruption to the existing North River Tunnel, which is more than a century old and carries a significant volume of passenger rail traffic between New Jersey and New York.
The Hudson Tunnel Project forms part of the wider Gateway Programme, a set of rail investments intended to increase capacity and resilience along the Northeast Corridor, which carries a large number of daily passenger and commuter rail services.