The project has entered the engineering phase of the Federal Transit Administration’s (FTA) Capital Investment Grants (CIG) Program, clearing the way to receive the vast majority of the federal funding needed for full construction.

The Gateway Development Commission (GDC) said it expected the remainder of federal funding to become available through the approximately US$4bn in Federal-State Partnership for Intercity Passenger Rail Grant Program, Rebuilding American Infrastructure with Sustainability and Equity (RAISE), and Consolidated Rail Infrastructure and Safety Improvements (CRISI) Grants that have already been applied for.

The funding, along with Amtrak’s contribution, allows early work construction to begin this year, and major construction to start in 2024. In addition, the states of New York and New Jersey, and the Port Authority of New York and New Jersey have committed to fully funding the local share of the project.

The next phase of the CIG Program process is negotiating and reaching a Full Funding Grant Agreement (FFGA) between the FTA and GDC, which is expected in 2024.

GDC applied to enter the critical engineering phase in October 2022 and worked in partnership with the FTA on a risk assessment and an updated financial plan for the project.

“The Gateway Program is an essential economic engine for New York and the nation, and the Hudson Tunnel Project moving into the engineering phase of the FTA’s Capital Investment Grants program is a great achievement,” said New York Governor Kathy Hochul. “I am proud of the work we have done with President Biden, Secretary Buttigieg, Senior Advisor Landrieu, and our partners in New Jersey to advance this project, and I thank Majority Leader Schumer and the New York Congressional delegation for providing critical support. I will continue working with our partners to ensure this national priority receives the Federal funds it needs to keep moving forward.”

The US$16bn project involves building the new 3.9km two-tube Gateway Tunnel under the Hudson River, between Newark, New Jersey, and New York City’s Penn Station, and refurbishing Amtrak’s existing 112-year-old North River rail tunnel, which was badly damaged by Hurricane Sandy in 2012. Amtrak’s Northeast Corridor is the most heavily-used passenger rail line in the US.

In June, the GDC issued RFQs for two major packages: EA1, the Hudson River Ground Stabilisation (HRGS) project; and 1A, the Palisades Tunnel project. In May it shortlisted three organisations in its search for a delivery partner. They are: Bechtel-HNTB joint venture; Hudson Delivery Partnership (Atkins North America Inc, Arup US Inc, and the McKissack Group); and MPA Delivery Partners (Parsons Transportation Group of New York Inc, Arcadis of New York Inc, and Mace North America Ltd).