NYC Hudson Tunnel construction halts as developer sues White House for breach of contract

In response to this, project developer Gateway Development Commission (GDC) has filed a lawsuit against the White House in the U.S. Court of Federal Claims. The lawsuit seeks a judgment to release “contractually obligated grant and loan funds” for the project.

GDC has stated the pause of construction work today has resulted in the loss of nearly 1,000 jobs.

Also known as the Gateway Development Programme, federal funding to the tune of $11bn (£8.6bn), the largest sum for any rail project in the US’s history, was agreed in July last year following support from the Biden-Harris Administration and the Bipartisan Infrastructure Law to construct the new rail tunnel between New York and New Jersey.

This announcement stated the U.S. Department of Transportation (USDOT) and GDC are legally bound to the terms of Capital Investment Grants, Federal-State Partnership Grants, RAISE Grant agreements and Railroad Rehabilitation and Investment Financing (RRIF) loans.

However, the scheme was “terminated” by Trump on 15 October, when he put a hold on future funding to the Hudson Tunnel Project despite the massive amount of work that has already taken place. The move was part of a record-breaking government shutdown that saw mass layoffs and cancellations of other programmes under the current US government administration.

Since then, construction had continued through utilisation of available funding sources and credit “to keep the project moving forward as planned while federal funding disbursements have been paused”, GDC announced at its 27 January board meeting.

However, with no movement from the federal government on restoring funding, the project will, as warned by GDC, pause construction at 5pm (EST) / 10pm (GMT) today.

Along with the pause, four major procurements that comprise the remaining construction packages for the project will also be put on hold until funding is restored. Beyond the immediate loss of 1,000 jobs today, GDC has stated an extended pause would put approximately 11,000 construction jobs on the current projects at risk.

It has further been stated that more than $1bn of federal, taxpayers’ money has been spent on the construction of the Hudson Tunnel Project to date, which is going to waste.

Regarding its law suit, GDC said: “The lawsuit makes clear that the shifting explanations the Administration has provided for this breach are plainly unlawful.”

GDC is claiming $205M (£150M) of disbursements owed to date through its lawsuit and it also seeking damages that will be incurred in the event of the construction pause or the termination of existing contracts.

NCE contacted the White House on a number of occasions for a comment relating to the complaint but has received no response. Previously, the White House blamed the Democrats’ unwillingness to help it evict “illegal aliens” for the halt of federal funds for the project.

GDC chief executive officer Tom Prendergast said: “For more than two years the hardworking men and women building the Hudson Tunnel Project have not missed a day of work.

“That will change today, because the federal administration continues to withhold funding for this vital investment in our nation’s rail infrastructure.

“After spending more than $1bn, and countless hours of hard work, on this project, we will be left with empty construction sites in New York and New Jersey.

“Today is a setback, but it is not the end. To those who have long championed the project, our workforce, and the riders who are relying on GDC to finally deliver the modern, reliable commute they deserve: know that our work is far from over. GDC will continue to do everything in our power to get our funding restored and deliver the most urgent infrastructure project in the country.”

New York GDC commissioner and co-chair Alicia Glen said: “Today we will send close to 1,000 hardworking men and women home because we can no longer afford to keep building the most important piece of rail infrastructure in the country.

“Not only that, we are also telling the hundreds of thousands of riders who take the train between New York and New Jersey every day that they have to wait even longer for the crumbling tunnel under the Hudson River to be fixed.

“Even one day of delay is too long when hundreds of livelihoods and virtually all train travel up and down the East Coast are at risk. We will continue to work around the clock until we get funding restored and get this critical project back on track.”

New Jersey GDC commissioner and co-chair Balpreet Grewal-Virk said: “2026 was supposed to be a year of major milestones for the Hudson Tunnel Project. Tunnel boring was supposed to start in New Jersey.

“Two major construction contracts were going to be awarded, creating tens of thousands of new jobs.

“Instead, nearly 1,000 workers will lose their jobs, and our construction sites will turn into ghost towns because our federal funding is being withheld.

“In the days and weeks ahead, GDC is going to continue doing everything we can to get funding restored so the many hardworking men and women employed by the Hudson Tunnel Project can get back to work, and we can go back to celebrating milestones on the way to delivering this urgently needed new tunnel.”

The twin tunnels proposed for the Hudson River Tunnel would be used by rail and would link Secaucus Station in New Jersey to Penn Station in Manhattan.

This new rail route would be close to the existing North River Tunnel, which was built in 1910 but suffered damage during Hurricane Sandy in 2012. As well as building the new tunnels, work will be done to rehabilitate the existing North River Tunnel.

There are currently 450 trains that use the North River Tunnel everyday so taking it out of action for repairs is impossible.

Overview of the Hudson Tunnel project

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