WEEHAWKEN, N.J. — On March 10, the Gateway Development Commission warned that Hudson River Tunnel contract awards were on hold. Absent continued federal funding, construction would halt within two to three months.

On April 27, the same agency voted to spend $1.29 billion on twin new tubes beneath the Hudson River.

The North River Tunnel opened in 1910. It carries approximately 200,000 passenger trips daily and suffers from corrosive salt water damage dating to Superstorm Sandy in 2012. The Federal Railroad Administration states that despite ongoing maintenance, the tunnel's systems continue to degrade and that this can only be addressed through comprehensive rehabilitation. Amtrak assistant division engineer David Albright said in November 2025 the tunnel is not at critical failure point but requires constant preventative maintenance.

The April award lands in the middle of a federal funding war that began September 30, 2025, when the U.S. Department of Transportation halted disbursements to review GDC's Disadvantaged Business Enterprise program. The department issued an Interim Final Rule on October 3, eliminating race- and sex-based presumptions of social disadvantage from the Disadvantaged Business Enterprise program. GDC paused enforcement of DBE participation requirements after the rule change and stated it would not set new contract goals until further notice.

Senator Chuck Schumer (D-NY) wrote to Trump on January 28 calling the DBE review a "supposed" justification for stalling funds. But Trump had already said publicly on October 16: "It's billions and billions of dollars that Schumer has worked 20 years to get. It's terminated. Tell him it's terminated." The next day he added: "We're cutting a $20 billion project that Schumer fought for 15 years to get... The project is gonna be dead." In February 2026 he told Fox News: "The project is going to be dead. It is pretty much dead right now."

White House officials pressed Schumer to help rename Penn Station and Dulles Airport for Trump in exchange for dropping the freeze, according to the New York Times.

Judge Richard Hertling in the Court of Federal Claims found on February 6 that DOT breached its agreements by withholding $205,275,358 without procedural protections. DOT paid. The withheld funds included $66.5 million from the FTA Capital Investment Grant, $106.2 million from the FRA Federal-State Partnership Grant, $2.3 million from the FTA RAISE Grant and $30.2 million in Railroad Rehabilitation and Improvement Financing loans to PANYNJ, New York State and NJ TRANSIT.

On March 12, Hertling dismissed most of GDC’s counts as moot but left open two: damages from the work stoppage and breach of the implied covenant of good faith and fair dealing. According to a Yahoo News account of the March 12 hearing, DOT's attorney could not explain why the department took five months to produce any compliance finding.

The March 23 board meeting deck showed that GDC had collected more than $254 million from the federal government in February and March. Those payments covered prior work for which DOT had previously withheld reimbursement, according to the agency's court filings. DOT has not guaranteed future disbursements. The department asked the court to stay the order forcing the payments and refused to confirm it would not reclaim the funds.

GDC has not explained what assurance it received that allowed the April contract award despite its March warning that funding remained unstable. The agency drew on a $500 million line of credit to keep construction alive during the freeze, and estimated that the suspension cost between $15 million and $20 million per month.

The $1.29 billion award covers twin 7,250-foot tubes from Weehawken to Manhattan. It includes nine cross-passages, ground stabilization beneath the Hudson-Bergen Light Rail and underpinning of the Willow Avenue viaduct. Six of ten Hudson Tunnel Project construction packages now carry contract awards or sit in active construction.

The Palisades Tunnel package will use two Herrenknecht TBMs from Germany, each 28 feet 8 inches in diameter, each weighing 1,680 tons, and each costing approximately $25 million. The machines will bore through the Palisades from the Hudson County Shaft in Weehawken. Each machine bores approximately 30 feet per day and will take an estimated one year to complete the 5,100-foot Palisades section.

Package 1C, which comprises the Hudson River tunnel, requires different machines. GDC spokesperson Molly Beckhardt said the Hudson River Tunnel TBMs will be pressurized-face machines designed for soft mud and clay under the river. Tunnelling Journal reports that the machines will also cut through the stabilized earth block created by ground stabilization work, as well as handle rock sections where the geology shifts. GDC has not publicly disclosed the manufacturer, cost or delivery timeline for the Package 1C machines in documents available at time of writing. Four firms responded to the initial request for qualifications and three were shortlisted before Traylor/Walsh/Skanska JV won.

New tunnels alone will not increase peak-hour capacity, as the Environmental Impact Statement states. Penn Station currently operates at approximately three times its design capacity, serving more than 600,000 daily passengers. Increasing capacity requires other planned elements, including a Penn Station expansion, the Portal South Bridge, East River Tunnel improvements, and other projects that remain unfunded. The Regional Plan Association estimates the complete Gateway Program could generate $445 billion in economic benefits through 2060. But that number is contingent on the completion of those unfunded plans.

For now, the contract is signed. DOT has refused to guarantee future payments, has asked the court to stay the order that forced past payments, and has refused to confirm it will not claw back the $254 million already received. GDC has a $1.29 billion commitment, a $500 million credit line already drawn, and no stated plan to issue municipal bonds if the freeze returns.

Sources

• Gateway Development Commission, "Press Release: Construction Pause Warning" (March 10, 2026)

• Gateway Development Commission, "March 2026 Board Meeting Presentation Deck" (March 23, 2026)

• Gateway Development Commission, "Resolution 0426-01, Authorization of Award of Contract GDC-26-008-HTP" (April 27, 2026)

• Gateway Development Commission, "Resolutions 0426-03 and 0426-04, OCIP Authorization" (April 27, 2026)

• Gateway Development Commission, "Disadvantaged Business Enterprise Program Update" (October 2025)

• Gateway Development Commission, Complaint, GDC v. United States, U.S. Court of Federal Claims, No. 1:2026cv00176 (February 2, 2026)

• Judge Richard Hertling, Ruling, GDC v. United States, U.S. Court of Federal Claims, No. 1:2026cv00176 (March 12, 2026)

• U.S. Department of Transportation, Federal Register, "Interim Final Rule on DBE Program" (October 3, 2025)

• U.S. Senator Chuck Schumer, Letter to President Trump (January 28, 2026)

• Larry Higgs, NJ.com, "It's really happening. $1.28B contract awarded to drill the Gateway tunnel under the Hudson" (April 27, 2026)

• Colleen Wilson, NorthJersey.com, "Gateway Tunnel Contract Awarded" (April 27, 2026)

• Engineering News-Record, "Gateway Awards $1.29B Final Hudson River Tunnel Boring Contract" (April 28, 2026)

• Construction Dive, "Traylor, Walsh, Skanska JV wins $1.29B Hudson Tunnel work package" (April 29, 2026)

• Construction Dive, "DOT Seeks Stay on Gateway Funding Order" (February 24, 2026)

• NJBIZ, "Gateway awards $1.29B Hudson River Tunnel contract" (April 28, 2026)

• Progressive Railroading, "Gateway commission lets contract for Hudson Tunnel boring" (April 29, 2026)

• Tunnelling Journal, "Gateway Tunnel Mixed-Use TBMs" (April 2026)

• Larry Higgs, NJ.com, "Gateway Tunnel TBM Specifications" (December 2025)

• Federal Transit Administration, "Quarterly PMOC Report" (June 2025)

• Amtrak Office of Inspector General, "Gateway Program Audit" (December 2025)

• Regional Plan Association, "The Economic Promise of the Gateway Program" (April 2025)

• Regional Plan Association, "New York Penn Station" (Current)

• NJ Monitor, "North River Tunnel Condition Report" (November 2025)

• Bond Buyer, "GDC CFO Maureen McCoy Interview" (September 2024)

• New York Times, "White House Pressed Schumer on Penn Station Renaming" (February 8, 2026)

• Federal Railroad Administration, "North River Tunnel Condition Statement" (Current)

• Yahoo News, "Court of Federal Claims Ruling on Gateway Funding" (March 12, 2026)

• Politico, "GDC $500M Line of Credit" (February 2026)

CBS News New York, "Trump Terminates Gateway Project" (October 16, 2025)

• NY Daily News, "Trump Cuts Gateway Funding" (October 16, 2025)

• NJ Spotlight News, "Trump Gateway Comments" (October 16, 2025)

• Bloomberg Government, "Trump $20 Billion Project Quote" (October 17, 2025)

• Audacy/1010 WINS, "Trump Gateway Project Dead" (October 17, 2025)

• USA Today, "Trump Fox News Gateway Interview" (February 18, 2026)

• News10 NBC, "MTA files lawsuit against USDOT over withheld funds" (March 17, 2026)

• Trains.com, "Judge Dismisses Most of Gateway Commission's Suit" (March 13, 2026)

• NJ Globe, "Gateway Lawsuit Ruled Moot" (March 12, 2026)