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$295 Million Grant Toward The Gateway Tunnel Project Doesn’t Tell The Whole Story


Dear Editor:

Senator Schumer’s announced $295 million federal grant toward a $600 million dollar cost for construction of a concrete casing for a box tunnel under the Hudson Yards doesn’t tell the whole story. Construction of the box tunnel is necessary, due to the multi billion development project to be built over the Hudson Yards. All this does is preserves future access to Penn Station from the proposed two new tunnels to be built as part of the $33.4 Billion Gateway Tunnel. It represents a fraction of the overall project scope and budget. We could end up with a hole in the ground, just like the four sections of the original full build proposed Second Avenue Subway from the late 1960’s. Construction was suspended in 1975 due the city fiscal crises.

Note the timing of this announcement just days before Republicans assume control of Congress. When I worked for the Federal Transit Administration, we would refer to these types of grant announcements as our end of year clearance sale. Gateway project advocates are afraid that a Republican controlled Congress might not share the same enthusiasm for this project as a Democratic controlled Congress.

Schumer missed the bigger picture for future survival of the Gateway project.

There is no guarantee (based upon future advancement of design and engineering, construction contractors responses to the procurement process for contract(s) award followed by change orders during construction due to unforeseen site conditions or last minute changes in scope) that the final cost could end up several billion more than the Gateway Development Commission’s updated $16.8 billion first phase project cost

In 2015, the estimated cost was $8.7 billion for two new plus rehabilitation of two existing Hudson River tunnels used by Amtrak and New Jersey Transit for access to New York’s Moynihan Penn Station. The total estimated cost for 100% of the proposed Gateway Tunnel project scope of work is $33.4 billion.

There is no firm commitment for any future approval of a Federal Transit Administration (FTA) Capital Investment Grant (CIG) Full Funding Grant Agreement (FFGA) to pay for this project also includes a cap on the total dollar commitment from Washington.

This means that the project sponsor is legally on the hook to pay for any additional costs above and beyond the agreed upon project cost at the time the CIG FFGA is offered and accepted by the grant recipient.

The Gateway Development Commission having no financial resources of its own, would have to turn to Amtrak, NJ Transit, Port Authority, Trenton and Albany to cover any costs overruns. They, in turn might raise tolls on bridges and tunnels, commuter fares and other taxes to pay for these potential additional costs. Commuters and taxpayers – buyer be ware!.

(Larry Penner is a transportation advocate, historian and writer who previously served as a former Director for the Federal Transit Administration Region 2 New York Office of Operations and Program Management).


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