24 Hour Local Real Estate News

Hudson River Tunnel Costs Rise Amid Funding Uncertainty

Phase one of the Hudson Tunnel Project is now expected to cost $12.98 billion. Phase one of the Hudson Tunnel Project is now expected to cost $12.98 billion.

NEW YORK CITY—The cost of the critical project to repair the aging North River Tunnel and the construction of a new rail tunnel under the Hudson River that links New York to New Jersey has risen to just under $13 billion as the federal government sends conflicting messages on its funding commitment for the project.

On Thursday, the U.S. Department of Transportation’s Federal Railroad Administration released the Draft Environmental Impact Statement for the Hudson River Tunnel Project that includes the repair of the existing twin-tube North River Tunnel and the construction of a new tunnel. Approximately 200,000 daily Amtrak and New Jersey Transit commuters use the existing North River rail tunnel beneath the Hudson River. The repair of the North River Tunnel and the construction of a new tunnel have been viewed as critical due to the age of the North Tunnel (built in 2010) as well as the damage the tunnel sustained from Hurricane Sandy in October 2012.

The estimated cost to complete the new Hudson River Tunnel is $11.1 billion. The rehabilitation of the North River Tunnel is estimated to cost $1.8 billion, putting the total estimated cost of the Hudson Tunnel Project at $12.98 billion.

The original cost estimate for the repair of the existing rail tunnel and the construction of a new dual-track tunnel had been pegged at approximately $7.7 billion. However, that cost estimate was calculated for the failed ARC Tunnel project that was cancelled by New Jersey Gov. Chris Christie in October 2010 over rising project costs.

The larger Gateway program, which includes other significant improvements to the Northeast rail corridor by Amtrak, was estimated to cost approximately $24 billion prior to the release of the first phase DEIS that also does not include the estimated $1.5-billion replacement of the Portal Bridge over the Hackensack River in northeast New Jersey.

The preferred alternative plan calls for the construction of two new rail tubes in a single tunnel beneath the Hudson River that can maintain the existing level of train service while the North River Tunnel tubes are taken out of service one at a time for rehabilitation. Once the North River Tunnel restoration is complete, both old and new tunnels will be in service, providing redundant capability and increased operational flexibility, the FRA notes in the DEIS.

John D. Porcari, interim executive director of the Gateway Program Development Corp. which is overseeing the Gateway project, told reporters at a press conference at Penn Station on Thursday that the release of the DEIS “is a significant milestone for a critically important project.”

The organization notes that construction of the Hudson Tunnel would avoid a potentially disastrous scenario if a tunnel closure was necessary. Closure of just one tube would reduce capacity by as much as 75%. Approximately 25 trains would be reduced to as few as six, “which would be a nightmare scenario for the region’s economy with the ripple effects felt nationwide,” the Gateway Program Development Corp. notes.

While the project partners—the State of New Jersey/New Jersey Transit, the Port Authority of New York & New Jersey, New York State and Amtrak—move forward on the project, recent actions by federal transit officials have created a murky financial picture for the venture. Earlier this week, the U.S. Department of Transportation notified the Gateway Development Corp. it was withdrawing from its board so that the DOT is not viewed as supporting one project over another, according to published reports.

The Trump Administration has proposed a $1-trillion infrastructure plan that relies heavily on private sector investment. However, that initiative has been derailed by Congress’ attempt to pass a sweeping health care bill that would replace Obamacare. Transportation officials and political leaders have also expressed concern over the administration’s call for the elimination of the New Starts program that was expected to be one funding source for the project.

Carlo A. Scissura, president and CEO of the New York Building Congress, says in a prepared statement that the DEIS completion by multiple federal agencies shows their strong commitment to the Gateway Project, which the Building Congress believes “is the single most important infrastructure project in the country.”

“We urge each stakeholder at the local, state and federal levels to come together on a financing plan that would allow for construction to begin as soon as the environmental review process is complete,” he adds.

“The New York business community considers Gateway our top priority infrastructure project,” says Kathryn S. Wylde, president and CEO of the Partnership for New York City. “It will provide essential connectivity between the global financial and commercial center in New York City with the rest of America west of the Hudson River. We are confident that the Trump Administration understands that this is a project of national significance and intends to partner with us in ensuring its timely completion,”

Under an expedited timeline, a completed FEIS is scheduled to be released by March 2018. Construction could commence in mid-2019 for the new tunnel construction and would extend to mid-2026, when the new tunnel would be completed. Immediately following completion of the new tunnel, the rehabilitation of the existing North River Tunnel would begin, starting in late 2026 and extending to early 2030 when the rehabilitation would be complete, and service using the North River Tunnel would be fully restored.

The FRA has scheduled three public hearings for public comment on the Hudson Tunnel Project DEIS. On Aug. 1st at the Hotel Pennsylvania Skytop Ballroom (18th floor) at 401 Seventh Ave. in New York City; on Aug. 3rd at the Secaucus Junction Rail Station at County Road and County Avenue in Secaucus, NJ and on Aug.10 at Union City High School at 2500 Kennedy Blvd. in Union City, NJ. Each hearing will include an afternoon evening session from 3 p.m. to 5 p.m. and from 6 p.m. to 8 p.m. Presentations of the plan are scheduled at each of the sessions at 3:15 p.m. and 6:15 p.m.

Copyright 2017. ALM Media Properties, LLC. All rights reserved.