GDC notified the contractors working on the project that funding for construction would run out on February 6. GDC’s contractors will spend the next two weeks winding down work at the active construction sites in New York, New Jersey, and the Hudson River. At that time, construction will stop until additional funding becomes available.
Four major procurements that comprise the remaining construction packages for the new tunnel are also impacted by the federal funding pause. Two construction packages – the Hudson River Tunnel Project and the NJ Surface Alignment Project – are planned to start this year, but contracts cannot be awarded until funding resumes.
GDC CEO Thomas Prendergast said: “Over the past two years, GDC, together with our federal and state partners, have made significant progress building the most urgent passenger rail infrastructure project in the country. The progress we have made since the project started construction would not have been possible without the support of the federal Administration.
“Since federal funding was paused in October, we have done everything in our power to keep construction moving forward as planned, but we cannot fund this work on credit indefinitely.”
Prendergast said pausing construction was “the absolute last resort”, and the GDC could continue to try to secure funding.
More than $1bn of taxpayers’ money have been spent on the project to date. Since October, GDC has used available funding sources and credit to keep the project going while federal funding disbursements have been paused. GDC has now drawn down nearly all available sources and credit and can no longer continue funding construction without access to the project’s funds.
Seventy per cent of the Hudson Tunnel Project’s US$16bn budget – roughly US$12bn – is funded by federal grants. The other US$4bn is funded through US Department of Transportation (USDOT) Build America Bureau loans to be repaid by the states of New York and New Jersey and the Port Authority of New York and New Jersey. Funding disbursements from all of these sources have been discontinued since October 1 last year.
GDC has signed and executed funding agreements with all Hudson Tunnel Project funders, including the USDOT, the Federal Transit Administration (FTA), and the Federal Railroad Administration. Federal funding of US$4.38bn is currently allocated to the project. On September 30, 2025, GDC received notice from the FTA that federal disbursements under the Capital Investment Grants (CIG) Programme would be paused pending a review of the Commission’s federally mandated Disadvantaged Business Enterprise (DBE) programme. The following day, all federal funding for the project – not just CIG funds – was paused.
Construction has continued while federal funding has been paused. Since October 1, GDC has procured two TBMs. The first is on site in New Jersey, ready for assembly, and the second is scheduled to be shipped in February.
It has also finished the Tonnelle Avenue bridge and made significant progress on the portal launch box; completed two major concrete pours for HYCC-3, totalling more than 6,585m3, and broke through the bulkhead, connecting to the completed sections of the concrete casing.
On the Hudson riverbed 84 primary columns and 112 secondary columns of reinforced earth have been mixed, bringing the total number of finished columns to 838, and 29 slurry wall panels have been installed for the Hudson County access shaft and 15 panels for the 12th Avenue access shaft. The Hudson County Shaft slurry wall is now more than 75% finished.
Pausing construction will result in the immediate loss of nearly 1,000 jobs. GDC says an extended pause would put at risk around 11,000 construction jobs on the current projects, as well as the 95,000 jobs and US$19.6bn in economic activity that construction of the Hudson Tunnel Project is anticipated to generate.
It also increases the risk that the 116-year-old North River Tunnel – already a cause of delays for passengers – will shut down.
