Another $77 million released for Gateway tunnel as funding battle continues

The federal government has released an additional $77 million in funding for the Hudson Tunnel Project, restoring more of the previously frozen federal support for the $16-billion rail tunnel connecting New York and New Jersey. According to Reuters, the latest disbursement brings the total amount released to $107 million following a recent court order directing federal agencies to resume payments. 

New York and New Jersey officials had filed suit after the U.S. Department of Transportation withheld roughly $205 million in project funding beginning in October, triggering a construction pause and layoffs affecting about 1,000 workers. Federal transportation officials said the latest payments are being processed in compliance with the court ruling, as reported by Reuters.

The Gateway Development Commission, which is overseeing the project, said construction remains paused until additional funds are received but that planning is underway to restart work as soon as financing flows consistently. The project includes construction of a new rail tunnel beneath the Hudson River and rehabilitation of the existing century-old tunnel, a critical link on the Northeast Corridor used by more than 200,000 daily passengers.

Federal funding agreements totaling approximately $15 billion for the project were finalized in 2024, with nearly $2 billion already spent on early construction and design work. Court proceedings over the funding freeze and broader project support are ongoing as state and federal officials work toward restoring full financing and resuming construction.

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