New Financial Plan Should Qualify Hudson Tunnel Project For Improved Rating

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 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.

-via Press Release

This article was posted on: August 30, 2021