Feds agree to pay half the cost of two new Hudson ‘Gateway’ rail tunnels

TRENTON – Five years after Gov. Christopher Christie canceled the ARC rail tunnel expanding train service between New Jersey and New York City, federal officials have agreed to pay half the cost for two new train tunnels, OK’ing a “Gateway” plan to work on the project.
The $20 billion project is critical because two existing tunnels are more than a century old and officials have said they will have to be closed within the next 10 to 20 years for repairs after both were badly damaged by saltwater intrusion during Superstorm Sandy in 2012.
The Northeast Corridor line carries 750,000 passengers between Boston and Washington daily. The tunnels are also critical parts of NJ Transit rail lines. If one tunnel is closed Amtrak officials estimate overall service would be reduced by more than 75 percent.
A new development corporation within the Port Authority of New York and New Jersey will oversee construction of the tunnel. The Gateway project is expected to take around 10 years to complete but would then allow repairs on the older tunnels. Eventually train service between New Jersey and New York would be doubled.
“It’s great for the region, for NJ Transit customers and for NJ Transit,” NJ Transit executive director Ronnie Hakim said last week. “I’m looking forward to participating as a partner among all of the stakeholders to start and get this important program underway.”
In September, Christie and New York Gov. Andrew Cuomo asked the federal government to agree to pick up half the costs of the project. New Jersey and New York will each have to pay for 25 percent of the project’s cost.
The states can secure the financing through low ¬interest federal Railroad Rehabilitation and Improvement Financing loans. Payments on that debt can be delayed until the new tunnels are operating. The federal funding is likely to come from grants, Amtrak construction funds, Amtrak’s profits from its Northeast Corridor line, annual budget appropriations and possibly a low¬ interest federal loan that would be repaid by Amtrak.