The Gateway Development Commission (GDC) has filed a lawsuit against the federal government in the U.S. Court of Federal Claims seeking judgment that would release contractually-obligated grant and loan funds for the Hudson Tunnel Project (HTP). If additional funding does not become available by February 6, 2026, construction of the HTP will have to pause, resulting in the loss of nearly 1,000 jobs.
The HTP is an urgent investment in America’s passenger rail network that involves building a new train tunnel connecting New Jersey and New York under the Hudson River and rehabilitating the North River Tunnel, which has been in service since 1910 and is a source of chronic delays for hundreds of thousands of daily riders.
The majority of the budget for the project is funded by federal grants. The U.S. Department of Transportation (USDOT) and GDC have been legally bound to the terms of Capital Investment Grants (CIG), Federal-State Partnership (FSP) Grant, and RAISE Grant agreements, and Railroad Rehabilitation and Investment Financing (RRIF) loans, since July 2024, when full funding for the HTP was secured. More than $1 billion worth of construction and investment has already been made into building the HTP.
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 lawsuit makes clear that the shifting explanations the Administration has provided for this breach are plainly unlawful.
For months, GDC has worked cooperatively with its federal partners to meet their requirements for restoring funding. GDC responded thoroughly and promptly to each request for information about the project’s federally-mandated Disadvantaged Business Enterprise (DBE) program and provided documentation that the project is in compliance with the Administration’s latest regulations.
Pausing construction will result in the immediate loss of nearly 1,000 jobs. An extended pause would put at risk approximately 11,000 jobs on the current projects, as well as the 95,000 jobs and $19.6 billion in economic activity that construction of the HTP is anticipated to generate overall.
It also increases the risk that the 116-year-old North River Tunnel – already a leading cause of delays that impact hundreds of thousands of daily riders – will shut down, severing the most heavily used passenger rail line in the country and leading to billions of dollars in lost time and productivity.
In addition to the $205 million in disbursements due to GDC, the complaint seeks damages that will be incurred in the event of a construction pause or termination of existing contracts.
-via Press Release
