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NJ, NY reach agreement for Gateway tunnel funding

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The Gateway Program summary map.
The Gateway Program summary map. - ()

Gov. Chris Christie and New York Gov. Andrew Cuomo announced commitments to fund 100 percent of their respective share of the new Gateway tunnel. The agreement follows a 2015 framework agreement in which the federal government agreed to fund 50 percent of the project.

The agreement for a combined $5.5 billion states that the State of New York will contribute $1.75 billion with NJ Transit committing $1.9 billion and the Port Authority contributing $1.9 billion.

“The commitments we make today mark a pivotal milestone in the construction of the Hudson River Tunnel Project, and builds on the work we began earlier this year with the early construction of the Portal North Bridge Project. It positions the project to immediately compete for federal Capital Investment Grant funds,” Christie said. “The Hudson Tunnel Project is critical to the regional and national economy and protects against a potentially disastrous scenario of a closure of one of the two tubes of the existing North River Tunnel.

“Together, with the rehabilitation of the existing tunnel, this project will result in the crucial Northeast Corridor having four tracks between New Jersey and New York under the Hudson River, allowing for increased ridership in the future.”

The $12.7 billion Gateway Hudson Tunnel Project will consist of a new two-track tunnel, the Hudson Yards Concrete Casing and the rehabilitation of the Amtrak North River Tunnel.

The existing Amtrak North River Tunnel, which opened in 1910 was severely damaged during Superstorm Sandy in 2012. The suspension of services due to damage or emergency could reduce tunnel capacity by 75 percent, the New Jersey Governor’s Office said.

“In a letter to the U.S. Department of Transportation, New York State Budget Director Robert Mujica said Gov. Cuomo will propose in the state’s forthcoming executive budget an appropriation each year over a 35-year period to pay debt service on a $1.75 billion fixed-interest loan to the Gateway Development Corp. with a 35-year term under the US DOT’s Railroad Rehabilitation & Improvement Financing (RRIF) program,” the New Jersey Governor’s Office said in a news release. “NJ Transit’s contribution to the project cost is consistent with the financial framework announced by the governors of New Jersey and New York in November 2015.  Under this framework, the federal and local share for the Gateway Program is allocated equally, with federal support accounting for 50 percent of the program, and the States of New Jersey and New York (including the Port Authority of New York and New Jersey) sharing the remaining 50 percent.

“The Port Authority, at the direction of the two governors, committed $2.7 billion in its ten-year capital plan, adopted in early 2017, for Gateway. This includes the Port Authority’s approximately $300 million commitment for the Portal North Bridge Project – another urgent element of the Gateway Program.  The remaining $2.4 billion is being dedicated to the new Gateway tunnel – which will net $1.9 billion towards construction after USDOT fees and accrued interest during construction.”

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Mario Marroquin

Mario Marroquin


Mario Marroquin covers real estate. A native of El Salvador, Mario is bilingual in English and Spanish. He graduated from Penn State University and worked in Pennsylvania before moving to New Jersey. His email is mariom@njbiz.com.

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