New Financial Plan Should Qualify Hudson Tunnel Project for Improved Rating

Strengthened Partner Commitments, Acquisition of Property, Aggressive Cost Management During Four Year Delay Highlight New Filing.
Gateway Partners Working Hand-in-Hand with New Administration

Newark – The Hudson Tunnel Project should qualify for advancement to the next phase of the Federal Transit Administration (FTA)’s Capital Investment Grants (CIG) Program, based on a new financial plan submitted today by the Gateway Program Project Partners.

The Project, for funding and financing purposes, includes the construction of a new two-track rail tunnel beneath the Hudson River, the comprehensive rehabilitation of the existing 110-year-old North River Tunnel, and the completion of the third and final section of the Hudson Yards Concrete Casing.

As outlined in the attached cover letter, the new financial plan recalculates and strengthens financial commitments by the project partners based on an updated cost estimate accounting for the four-year delay in the Project during the previous Administration. Major construction on the new tunnel is estimated to begin in August 2023 and the Project’s construction cost is estimated at $12.3 billion, including $10.1 billion for the new tunnel and $2.2 billion for full rehabilitation of the existing tunnel.

The Project’s construction cost estimate is down from the $12.7 billion cost in 2017, despite a four-year delay by the prior Administration. However, it represents an increase from last year due to time-driven escalation and the continuing need to push back the calendar for beginning major construction. Overall, the Project Partners have taken more than $2 billion out of the cost estimate, including $1.4 billion based on advanced design work in the 2019 filing and more than $900 million in property acquisition estimates since Amtrak was able to acquire a major Manhattan property in
recent weeks, moving quickly after the U.S. Department of Transportation finalized its
environmental review under the new Administration.

The Partners also commit to aggressively managing cost and schedule during the procurement and construction of the project, incentivizing contractors and seeking opportunities for early work to further mitigate cost and schedule risk.

“The Hudson Tunnel Project is of the utmost importance to the economic well-being of New Jersey, our region, and our country,” said New Jersey Governor Phil Murphy. “The updated financial plan that is being submitted today exhibits the commitment of our state and that of our partners to the commencement and completion of the single largest critical infrastructure project in the United States. We look forward to working with the Biden Administration, Amtrak, New York, and the Port Authority to begin construction and to provide reliable rail service while creating tens of thousands
of jobs and billions in economic benefits to the New Jersey – New York area.”

“All of the partners are fully committed to the Hudson Tunnel Project and have collectively committed to repay more than $6 billion in Federal loans to support construction,” said Steven M. Cohen, Gateway Commission Co-Chair and New York Commissioner. “The project will create thousands of jobs up and down the American supply chain and help stimulate the U.S. economy. We must act without delay.”

“Construction on the Hudson Tunnel Project cannot begin soon enough for the thousands of NJ TRANSIT customers who must continue to rely on the century-old tunnel daily,” said Balpreet Grewal-Virk, Gateway Commission Co-Chair and New Jersey Commissioner. “This financial plan is a major step toward finally putting shovels in the ground and getting to work building the rail infrastructure we need for the economy of the future.”

“Amtrak is pleased to have upheld its commitment to the Hudson Tunnel Project by completing the acquisition of New York property needed for a future ventilation and emergency egress shaft,” said Tony Coscia, Gateway Commission Vice Chair and Amtrak Commissioner. “Amtrak remains confident in the success of our partners and in the project’s success. Now is the time to move this project to construction once and for all.”

The plan seeks approximately $5.6 billion in FTA Capital Investment Grant (CIG) funding, or approximately 44% of the CIG-eligible project costs. It is supported by more than $6 billion in commitments towards estimated construction costs by the State of New York, State of New Jersey, and the Port Authority of New York and New Jersey to support the Commission’s borrowing of low-interest Federal loans. Amtrak has strengthened and demonstrated its commitment toward contributing $1.4 billion toward the Project’s construction costs and has moved quickly to acquire real property in Manhattan for the project. The states of New Jersey and New York both provided
strengthened commitment plans for making support payments to repay the low interest Federal loans in the plan.

The updated plan was developed in partnership with the FTA, a substantial change from the prior Administration.

The Gateway Program is the most urgent infrastructure program in the country – a comprehensive set of rail investments that will improve commuter and intercity services, add needed resiliency and create new capacity for the busiest section of the Northeast Corridor (NEC). The NEC is the most heavily used passenger rail line in
the country hosting more than 2,200 train movements and 800,000 passenger trips daily.