The rail tunnel being built under the Hudson River between New Jersey and New York is intended to expand service along the nation’s busiest passenger rail line.
Gateway Tunnel Engineers Provide Update on Project Construction
Hamed Najed, Chief Engineer of the Gateway Development Board, will speak about the project on Wednesday, February 4, 2026 in North Bergen.
NEW YORK – Construction on the nation’s largest infrastructure project could resume after a court ordered the Trump administration to release funds it had withheld to gain influence over New York state House Democrats.
On February 18, New York Attorney General Letitia James announced that the U.S. Department of Transportation has released approximately $130 million in funding for the $16 billion Gateway Tunnel project in pending litigation. The rail tunnel project, located under the Hudson River between New Jersey and New York, aims to strengthen tunnels along the Northeast Corridor, the busiest passenger rail line in the United States.
The resumption of funding is a blow to President Donald Trump, who had vowed to cancel the project amid a budget battle with Senate Majority Leader Chuck Schumer (D-N.Y.).
“This freezing of funds was illegal from the beginning,” James, who has himself been the target of legal retaliation from President Trump, said in a statement. “We took swift action in court and all dollars that were illegally withheld have now been released.”
The Manhattan-based U.S. attorney’s office, which represents federal officials in court, declined to comment. Neither the White House nor the U.S. Department of Transportation immediately responded to requests for comment.
Construction had already begun on several sites before federal authorities abruptly withdrew funding. New York officials say about $2 billion has already been spent on the project.
The project would construct nine miles of new passenger rail track with dual-tube tunnels and repair an existing 116-year-old tunnel currently used by Amtrak and New Jersey Transit trains that was damaged in 2012’s Superstorm Sandy. A single damaged tunnel could cost the nation’s largest regional economy billions of dollars a year, the equivalent of more than 30,000 jobs, according to the nonprofit Regional Planning Association.
Trump, a former New York real estate mogul who calls himself the “building president,” failed to pass an infrastructure spending bill and canceled projects in the fall during the federal government shutdown. On October 1, the first day of the shutdown, federal regulators withheld funding for Manhattan’s Gateway project and Second Avenue subway construction, citing New York City’s Disadvantaged Business Enterprise Program, an equity initiative aimed at expanding participation in federally supported contracts.
President Trump told Fox News: “I’m canceling this project.”
“This project will die,” he said. “It’s almost dead now.”
President Trump also reportedly wanted New York’s Penn Station and Virginia’s Dulles International Airport to be renamed after him in order to unfreeze billions of federal dollars for the Gateway project. President Trump later said that his staff, not him, came up with the idea.
In early February, the project was canceled due to lack of funding, affecting approximately 1,000 employees.
On February 3, the attorneys general of New York and New Jersey sued the administration for funding relief. U.S. District Judge Janet A. Vargas then issued a temporary restraining order in Manhattan federal court, requiring the funds to be released with subsequent updates on the payment of all current and future expenses.
The federal government owes about $230 million, according to James’ office. The agency released $30 million on Feb. 13 and then released another $77 million on Feb. 17, according to James’ office. The Gateway Development Commission, the joint New Jersey and New York corporation that oversees the project, received the remaining funds, approximately $127 million, by wire on the morning of February 18th.
Commission CEO Tom Prendergast said in a statement on February 18 that contractors would be notified this afternoon when work would resume next week. The project currently has more than $205 million in working funding.
The day before, New York Gov. Kathy Hochul (D) stood alongside union leaders and workers at a project site in New York City. She said thousands of jobs are at risk due to President Trump’s suspension of the policy.
“Today’s progress is important, but we need certainty that funding for Gateway will continue for the life of the project,” Hochul said in a Feb. 18 statement. “The federal government has a legal obligation to fully fund Gateway, and New York State will not accept anything less.”
The New York City Construction Trades Council, which represents workers on the project, did not respond to a request for comment.
According to the commission, the Northeast Corridor carries about 800,000 passengers each day. The section of the project between New Jersey and Manhattan is the busiest part of the corridor.
Eduardo Cuevas is based in New York City. Contact us via email (emcuevas1@usatoday.com) or Signal (emcuevas.01).
