Frozen Gateway Funding Hurts More Than The Northeast

With the blizzard of legal actions swirling around the giant Gateway tunnel project between New Jersey and New York, it’s easy to lose sight of the reality that, at least for now, the Federal government has made one of the biggest-ever blunders in the long and checkered history of Federal infrastructure blunders.

Agreeing that officials from New York and New Jersey who filed a lawsuit against the government had a high likelihood of their claim succeeding, late Friday a Federal judge issued a temporary restraining order directing the Trump Administration to cough up the funds already appropriated for building the Gateway tunnel complex -- money that’s been frozen since October for transparently partisan reasons.

The Justice Dept. is appealing to the Second Circuit and while Judge Vargas this afternoon denied the Administration’s request to stay her Friday temporary restraining order, she did say payment will no longer need to resume by 5 pm Eastern on Thursday -- giving Justice the time to wait and see what the Second Circuit thinks about all this.

We’ve written about this situation extensively, and we’ve been pleased to see the judge aiming to preserve the program’s progress while other challenges work their way through the Federal courts and the U.S. Court of Federal Claims.

But one thing that has been disappointing to me over the weekend while reading through the news coverage was the genuinely baffling confusion the general press seems to have about what makes this a nationally significant program and not just a regional political spat.

That’s not to say it’s NOT important regionally. Of course it is. The Northeast Corridor powers 20 percent of the nation’s gross domestic product. Our friends at New York’s Regional Plan Association (yes, the “other” RPA!) in April 2024 updated some of the study numbers around the project and found that construction will generate 95,000 jobs and $19.6 billion in economic activity.

But anyone talking about Gateway needs to recognize that a project of this size and scope involves the whole rail infrastructure industry. Kneecapping this project -- especially over something as petty as naming rights or as clearly pretextual as DEI language in the original contracts negotiated with the Biden Administration -- does a lot more than just poking eyes in New York and New Jersey. It involves a whole supply chain, including places where more than a few folks probably pulled the lever for Trump during the November 2024 elections.

Major tunneling equipment for the Hudson Tunnel Project was assembled in Solon, Ohio. Structural steel and fabricated assemblies come from suppliers in Pennsylvania.

Engineering and program management services come from companies with substantial operations in Texas. Specialized electrical systems and industrial components are coming from factories in North Carolina and Tennessee. Even upstream suppliers of geotechnical monitoring equipment and industrial materials in states like Colorado and Alabama are directly tied to active Gateway contracts.

When work halted on Friday because Federal funds were frozen, it wasn’t just New York and New Jersey construction sites that went dark -- it was a multi-state American supply chain already delivering real components to a live national infrastructure project.

Meanwhile, you can see the most immediate consequences at the main worksites. The Gateway Development Commission’s chief, Thomas Prendergast, acknowledged last week that the commission’s lifeline -- a bank line of credit taken out to tide the project over since October -- had run out while waiting for the resumption of funds. And with that, about 1,000 workers were laid off...crews who were working at four construction sites in Manhattan, North Jersey and in the Hudson River, to drive hollow cylinders known as king piles into the bottom of the river.

“For more than two years the hardworking men and women building the Hudson Tunnel Project have not missed a day of work. That will change today, because the federal Administration continues to withhold funding for this vital investment in our nation’s rail infrastructure,” Prendergast said Friday in a prepared statement.

Prendergast goes on to say that “After spending more than $1 billion, and countless hours of hard work, on this project, we will be left with empty construction sites in New York and New Jersey.”

We’ll also be left with a string of empty promises from an Administration that claimed when it entered office a bit more than a year ago that it was committed to picking up the pace on long-delayed infrastructure projects.