GDC Suspends $16 Billion Hudson Tunnel Project Construction

The Gateway Development Commission (GDC) announced that all construction on the Hudson Tunnel project will be suspended at 5 p.m. Eastern time today. The suspension is a direct result of the continued pause on disbursements of federally obligated funding. This action freezes work on a critical component of the Gateway program designed to improve rail capacity between New Jersey and New York City.

According to the GDC press release, four major procurements that constitute the project’s remaining construction packages will also be placed on hold until the federal funding stream is restored. The Trump administration has suspended the release of contractually obligated funds to the project since October 1, 2025. The majority of the tunnel project’s $16 billion budget is structured to be financed through federal grants and loans.

While the primary announcement indicates a complete halt, recent data suggests a more complex financial situation. Verification sources report that the federal government recently disbursed at least two payments of previously frozen funds, totaling $107 million ($77 million and $30 million). This presents a discrepancy with the GDC’s statement that disbursements “remain paused.” GDC spokesperson Molly Beckhardt clarified that despite the recent fund release, “Construction remains paused for now and we continue to work with our contractors to plan how to deploy these funds in the most effective way.”

President Trump has publicly affirmed his opposition to the project, vowing in a social media post that no federal dollars would be used to cover potential cost overruns. He has described the infrastructure initiative as a “future boondoggle” and a potential “financially catastrophic” undertaking for the region. Democrats from New York and New Jersey, including New York Governor Kathy Hochul, have made repeated calls to the administration to release the project’s allocated funding.

The project entails the construction of new rail tunnels and the rehabilitation of existing infrastructure under the Hudson River, a vital artery for the Northeast Corridor. The GDC has not provided a timeline for the resumption of work. The immediate next step for the commission involves planning with contractors for the potential deployment of the recently disbursed smaller funding packages to restart limited construction activities where possible.