New York City tunnel project will halt work in days if Trump does not restore funding

By David Shepardson

WASHINGTON, Jan 27 (Reuters) – The Trump administration’s suspension of funding for a new $16  billion Hudson River tunnel — the linchpin of rail travel between New York and New Jersey — will force work to be halted next week, officials said on Tuesday.

President Donald Trump said in October he had terminated the project. His Republican administration has repeatedly targeted major transit and infrastructure projects in Democratic-led states.

The Gateway Development Commission and U.S. Representative Josh Gottheimer, a New Jersey Democrat, said at a hearing on Tuesday the project will be suspended on February 6 if Trump does not restore the funding that was approved during the administration of former President Joe Biden. He said about 1,000 workers will immediately lose their jobs.

Any failure of the existing Hudson tunnel, which was built in 1910 and heavily damaged by Hurricane Sandy in 2012, would hobble commuting in the metropolitan area that produces 10% of the country’s economic output and is used by 200,000 travelers daily. More than $1 billion has been spent on the project.

The initiative, which received $12 billion in federal grants and $4 billion in federal loans, involves repairs to an existing tunnel and the construction of a new one for passenger railroad Amtrak and state commuter lines between New Jersey and Manhattan.

“The president’s refusal to fund the Gateway Tunnel project is not only an illegal attack on New Jersey but also shows a reckless disregard for our economy and the livelihoods of working families,” said New Jersey Governor Mikie Sherrill in a statement.

White House spokesman Kush Desai said Democrats “are standing in the way of a deal for the Gateway Tunnel Project by refusing to negotiate with the Trump administration. There is nothing stopping Democrats from prioritizing the interests of Americans over illegal aliens and getting this project back on track.”

The U.S. Transportation Department accused Gateway in December of violating the law in the Disadvantaged Business Enterprise program to help small businesses run by “socially and economically disadvantaged individuals.” Following a court ruling, women and some members of minority racial groups are no longer presumed to be economically disadvantaged when bidding for contracts.

Gateway said it told USDOT that it was in compliance with federal law. Trump, a former New York City real estate developer, refused to approve funding for the projects in his first term.

New York Governor Kathy Hochul, a Democrat, said in a statement the looming end of construction is the “latest collateral damage of Donald Trump’s vindictive quest to hurt New Yorkers no matter the cost. The stakes are enormous: hundreds of thousands of daily commuters, 10,000 union jobs and billions of dollars in economic benefits.”

USDOT has repeatedly threatened New York transit funding.

In August, the department threatened to withhold 25% of federal transit funding for New York state’s Metropolitan Transportation Authority if the agency does not improve safety for subway track maintenance workers. The Trump administration is also trying to kill Manhattan’s congestion pricing program introduced last year, designed to reduce traffic and raise billions in funds for mass transit.

(Reporting by David Shepardson in Washington; Editing by Chizu Nomiyama, Matthew Lewis and Howard Goller)