NEW YORK (BLOOMBERG) -- The public commission building the $16 billion Gateway rail tunnel between New York and New Jersey said it sued the Trump administration over a federal funding freeze that could halt work on one of the nation’s biggest infrastructure projects.
Gateway would provide a new route under the Hudson River for Amtrak and New Jersey Transit and must be completed before the existing tube — more than 100 years old and corroded by saltwater — can be refurbished. Project officials say they’ll stop construction Feb. 6 unless funding is restored, and officials in both states have urged the administration to unleash the money.
The Gateway Development Commission said in a statement late Monday that it filed a breach-of-contract complaint in the US Court of Federal Claims. The filing couldn’t be immediately confirmed in court records.
“Despite its contractual commitments to fund the project, the federal government has suspended the release of its contractually obligated funds since October 1, 2025,” the commission said in the statement. “The lawsuit makes clear that the shifting explanations the administration has provided for this breach are plainly unlawful.”
Spokespeople for the US Department of Transportation and the White House didn’t immediately respond to requests for comment.
The Trump administration is withholding about $18 billion from public transportation projects in areas with Democratic mayors or governors, including New York City’s Second Avenue subway extension to Harlem and transit improvements in Chicago. In October, the transportation department said it was reviewing whether those projects comply with a new rule that bars race- and sex-based contracting requirements.
While transit officials say they have provided information showing that their projects are compliant, DOT has yet to release the funds. The Metropolitan Transportation Authority, which runs the city’s transit network, needs federal funds to secure an agreement in the next couple of months to retrofit an existing tunnel along Second Avenue, Jamie Torres-Springer, MTA’s president of construction and development, said Wednesday.
The new Hudson River tunnel — and the renovation of the old one — will expand train capacity, reduce frequent delays and allow more Amtrak and New Jersey Transit trains in and out of Manhattan. It’s a vital link in the region, with 450 trains carrying thousands of commuters and travelers through the tunnel every day, according to Gateway.
Stopping work on the tunnel would be the latest major setback in a years long initiative to ease congestion along the Northeast Corridor. Former New Jersey Governor Chris Christie in 2010 terminated a prior program to build a new tunnel, called Access to the Region’s Core, or ARC, claiming his state would be forced to take on any cost overruns.