Gateway Tunnel Project Could Collapse Without Federal Funding

Construction has resumed on the $16 billion Gateway Hudson Tunnel project following a legal victory against the Trump administration, but officials warn the work may only last 90 days before the money runs out again.

The February 24 restart brought 1,000 workers back to the New Jersey sites, but the Gateway Development Commission (GDC) says the project is essentially on life support. The $205 million recently unfrozen by court order covers only the immediate backlog.

Without a reliable commitment from the U.S. Department of Transportation, momentum will hit a dead end by early summer, potentially derailing repairs on a critical 10-mile commuting corridor which carries more than 200,000 NJ Transit and Amtrak passengers daily.

“Our workers are back, and we are moving full steam ahead across all our construction sites, but we will have no choice but to stop work again if the federal government does not continue to disburse the funds that are committed to the project,” said Tom Prendergast, CEO of Gateway Development Commission.

The 115-year-old tunnel, which runs under the Hudson River between New Jersey and New York, has needed repairs due to damage from Hurricane Sandy in 2012. President Donald Trump has opposed the project since his first term in office and halted funding in late Sept. 2025 due to “unconstitutional DEI practices,” suspending construction for a month in Feb. 2026.

While work on the tunnel has resumed, the Trump administration has also continued its efforts to block construction of the Gateway Project. After the federal government unfroze its funding, the Department of Transportation filed an appeal to reverse this court’s order. The Second Circuit Court of Appeals denied it on March 11.

Following this verdict, Gov. Mikie Sherrill voiced her support, saying, “Just yesterday, we won for the fourth time in court, ensuring the Trump administration keeps funding the project every month, as it is legally obligated to do.”

State Attorney General Jennifer Davenport also commended the Second Circuit’s rejection of the Department of Transportation’s efforts to resume its “political and unlawful funding freeze of the Gateway project.”

​“It’s time for the Administration to admit that its efforts to derail the project and reinstitute its funding freeze are a waste of time, and focus on lowering costs for everyone instead of attacking our commuters and our workers,” Davenport said in a statement.

Meanwhile, the Gateway Development Commission had filed an additional lawsuit against the Trump Administration for committing an “unlawful” breach of contract by failing to release funding for the Gateway Project.

On March 12, federal claims U.S. Court of Federal Claims Judge Richard Hertling dismissed six of the lawsuit’s eight counts. Though he agreed the Department of Transportation breached its contract by withholding the $205 million it owed, Hertling said that there was “nothing more to order” now that the money has been paid.

According to the New York Times, the Gateway Development Commission expressed concern that the federal government might withhold funding for the Gateway Hudson Tunnel Project. However, a GDC spokesperson released a statement saying that the judge “made it clear that the court would provide expedited review of similar claims if they arise in the future.”

Despite these ongoing challenges, the Commission has asserted its commitment to completing construction of the Gateway Project.

“This project is too important to delay. That’s why we’re doing everything possible to regain consistent and predictable access to all our federal funding so we can keep our workers on the job and deliver the reliable, modern rail transit Americans deserve,” said Prendergast.

The Gateway Development Commission has already finished development of the Tonnelle Avenue Bridge and Utility Relocation Project in late 2025. It is now prepping boring machines to create the first mile of tunnels on the New Jersey side of the Hudson River as part of the Palisades Tunnel Project.

Since progress has been made, local leaders say that they will not accept the federal government halting construction a second time.

“We will continue to fight, and continue to win, if Donald Trump tries to illegally stop funding again,” said Sherrill.

Editor’s note: A change was made to reflect the correct start date of construction.