Financial plan submitted for Hudson Tunnel

Hudson Tunnel projectThe Gateway Programme Project partners have submitted the financial plan for the Hudson Tunnel project which would benefit funding from Federal Transit Administration (FTA)’s Capital Investment Grants (CIG) Programme.

Under the new financial plan, which recalculates and strengthens financial commitments by the project partners, the construction cost is estimated at USD 12.3 billion, down from USD 12.7 billion estimated in 2017, and includes USD 10.1 billion for the new tunnel and USD 2.2 billion for full rehabilitation of the existing tunnel.

But the latest cost represents an increase from last year due to time-driven escalation and the continuing need to push back the calendar for beginning major construction. Overall, the project partners have taken more than USD 2 billion out of the cost estimate, including USD 1.4 billion based on advanced design work in the 2019 filing and more than USD 900 million in property acquisition estimates since Amtrak was able to acquire a major Manhattan property in recent weeks, moving quickly after the U.S. Department of Transportation finalised its environmental review.

The partners also commit to aggressively managing cost and schedule during the procurement and construction of the project, incentivizing contractors and seeking opportunities for early work to further mitigate cost and schedule risk. The partners are committed to collectively repay USD 6 billion in federal loans to support the construction works.

The plan seeks USD 5.6 billion in CIG funding, or 44% of the CIG-eligible project costs. It is supported by more than USD 6 billion in commitments towards estimated construction costs by the State of New York, State of New Jersey, and the Port Authority of New York and New Jersey to support the Commission’s borrowing of low-interest federal loans. Amtrak will contribute with USD 1.4 billion for construction works and has moved quickly to acquire real property in Manhattan for the project. The states of New Jersey and New York both provided strengthened commitment plans for making support payments to repay the low interest federal loans in the plan.

The construction works for the four-year delayed project are expected to start in August 2023.

“The Hudson Tunnel project is of the utmost importance to the economic well-being of New Jersey, our region, and our country. The updated financial plan that is being submitted exhibits the commitment of our state and that of our partners to the commencement and completion of the single largest critical infrastructure project in the United States,” New Jersey Governor Phil Murphy said.

The project covers the construction of a new two-track rail tunnel beneath the Hudson River from New Jersey to Manhattan, the comprehensive rehabilitation of the existing 110-year-old North River tunnel, which faced serious damage during Superstorm Sandy in 2012, and the completion of the third and final section of the Hudson Yards concrete casing.

The existing tunnel is a critical link in the region’s trans-Hudson commuting system, and the Hudson Tunnel project is urgently needed. A closure of just one tube could reduce capacity by as much as 75%, and force tens of thousands of commuters and travelers into other modes of travel, pushing them on to already congested bridges, tunnels and roads.

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