Feds Question NY/NJ Tunnel Funding Plan

The Gateway Development Corporation is being grilled for its publicized plans to spend an estimated $13 billion on a rail tunnel beneath the Hudson River.

The Gateway Development Corporation is being grilled for its publicized plans to spend an estimated $13 billion on a rail tunnel beneath the Hudson River. On Friday, an official at the nation’s federal transportation agency wrote to express concern over the group’s announcement that it will rely on a “non-existent” agreement in which the federal government will pay half the bill for the project.

As reported by the Associated Press, K. Jane Williams, the deputy administrator of the FDA, wrote in her letter to New York and New Jersey officials about the funding proposal made by the states seeking a 50 percent federal investment in the project. In her letter, she said the amount is “considerably higher than much existing precedent for past ‘mega projects’” and that such a payout would deplete their existing grant program. She criticized the states’ expectation that the federal government would provide half the funding, which may have been discussed at an earlier time with the Obama administration. “We consider it unhelpful to reference a non-existent ‘agreement’ rather than directly address the responsibility for funding a local project where 9 out of 10 passengers are local transit riders,” Williams wrote.

President Donald Trump has not yet weighed in on the matter, but he is expected to reveal his plans for infrastructure next month. Both states also plan to use federal loans for the first phase of the project, and each is scrambling to find a way to pay them back. This month, NYS’s budget director, Robert Mujica Jr., wrote a letter to the Department of Transportation outlining plans to earmark money each year for 35 years to repay the $1.75 billion loan. Outgoing NJ Governor, Chris Christie, made plans to repay the $1.9 billion loan by imposing a fare hike of 90 cents for rail riders on the New Jersey Transit beginning in 2020, with further rate increases scheduled for 2028 and 2038. Brian Murray, Christie’s spokesman said on Friday, “We are confident that, as the White House advances an infrastructure proposal this year, federal funding for the most important transportation project in the United States will be addressed.”

The Gateway Development Corporation, the bi-state group of representatives which together with Amtrak are working to oversee the Gateway project, also made a statement on Friday. “There is no more urgent infrastructure project than Gateway, and posturing aside we are confident that the Trump Administration will engage with us as the President turns to infrastructure in 2018,” said the group’s Spokesman.

The first phase of the project would cost an estimated $11 billion. In the future phases, the project would likely take on adding track capacity in NJ, and expanding New York’s Penn Station. Once the new tunnels are built, the existing tunnels would be closed for repair work. Amtrak, the owner of the tunnels, has estimated that the tunnels, which are crossed by about 750,000 commuters daily, may fail in the next 10 to 15 years. The repair work, which would cost somewhere between $1 to $2 billion is not included in the state’s funding plan. In her letter, Williams also addresses this omission.

By: Benyamin Davidsons

 

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