The Trump administration is distancing itself from the Gateway Project, which will only get more expensive to fund.
Connecting New York and New Jersey beneath the Hudson River, the North River tunnels serve millions of passengers each day. More than 100 years old, the two tracks also suffer frequent delays due to mechanical failures, compounded by Hurricane Sandy’s flooding. Senators on both sides of the Hudson have argued the tunnels could soon require an extended, full-scale closure for major overhauls—which would “essentially shut down the Northeast Corridor.”
So if you thought Penn Station’s “summer of hell,” which kicked off Monday, sounded bad, remember that things could get much, much worse.
Hundreds of thousands of commuters on New Jersey Transit, Long Island Railroad, and Amtrak trains are bracing for cancellations and delays today through the end of August, thanks to major track repairs at Penn Station. But this represents only the first wave of attention needed by the commuter hub and its corridors. The largest, and most critical, is called the Gateway Project, which would add a new rail tunnel under the Hudson River, adding redundancy in the case of a track closure on the North River tunnels. The plan would also further upgrade and increase tracks at Penn Station.
That sounds expensive!
Indeed it is: The price tag on the Gateway Project was projected to break the record $24 billion spent on the Big Dig, the most expensive road project in U.S. history.
And that was before last week, when a new report released by Amtrak pegged the cost of the Hudson River Tunnel at nearly $13 billion—a steep increase over an earlier estimate of $7.7 billion. Amtrak explained to Crain’s that the new cost represents refined engineering plans. With that price hike, the full package could ramp up to $29.1 billion.
The cost is likely to keep creeping higher, because that’s what mega-projects do—especially in New York. Stringent labor requirements, high construction costs, and long-term debt financing are important factors. New York is also prone to striking contracts that de-incentivize efficient work.
Tunneling is particularly prone to delays and hiccups, which cost project leaders by the minute. (This is a legitimate reason for Elon Musk to get into the boring business—subterranean cities and Martian colonization aside, better tunneling technology could speed up the process and bring costs down.)
How are they going to pay for this?
Under President Obama, New York and New Jersey agreed to split the cost with the federal government—but that was then. The Trump administration has called to slash the DOT’s New Start program, which funds $2.3 billion in transportation projects like Gateway every year. The president also hopes to dramatically cut Amtrak funding. That’s why the Gateway Development Corporation is bending over backwards to signal willingness to take on private financing partners—a signature focus of Trump’s infrastructure platform.
Elaine Chao, the secretary of transportation, has called the Gateway an “absolute priority”—but earlier this month, the DOT formally withdrew its representative from the advisory board that oversees the project. As with so much in the White House, Trump’s rhetoric on infrastructure has so far produced mixed signals, anxiety, and zero legislation.
A new rail tunnel in the only corridor where Amtrak makes money could be an attractive prospect for private investors, indeed. But public-private partnerships need big public support to leverage that kind of buy-in. For the Gateway, some of that has got to come from the federal government.
Why should I care?
Love it or hate it, the economic functionality of New York City concerns the whole country—including, and especially, what goes in and out of by train. It’s estimated that 10 percent of U.S. gross domestic product depends on transit between New York and New Jersey alone; the Northeast Corridor, of which New York City is at the center, is responsible for about 20 percent. The Partnership for New York City figures that every hour New Jersey and Long Island train commuters are delayed costs Manhattan employers alone $15 million. Letting the Gateway project sit unattended long enough could make $24 billion look like a bargain.