Feds Call NJ-NY Gateway Tunnel ‘Most Important Rail Project in U.S.’

Meir Rinde | June 16, 2015 | Transportation
But near-insurmountable difficulties remain to be resolved -- such as where the requisite $15 billion will come from

Credit: U.S. Department of Transportation
New Jersey entrance to the two century-old tunnels that carry Amtrak and NJ Transit trains into New York City
The urgent need for new rail tunnels under the Hudson River is finally getting some serious attention after years of little activity.

At a closely watched summit of transportation leaders in New York last month, a top official from the Obama administration called Amtrak’s proposed Gateway tunnel between northern New Jersey and Manhattan “the most important rail project in the United States.” Peter Rogoff, the acting undersecretary of transportation, said the two states must act immediately to advance a plan, sparking attendees’ hopes that the highly complex, expensive, long-stalled project might finally get underway.

“It was like, ‘Whoa! We finally are hearing it from Washington,’” Martin Robins, the dean of New Jersey transportation experts and a conference participant, said after the meeting. “I wish it had come earlier.”

The sign of possible movement comes five years after Gov. Chris Christie canceled NJ Transit’s ARC (Access to the Region’s Core) tunnel project under the Hudson, citing the project’s potential high cost. It comes two and half years after Hurricane Sandy ravaged the existing, 105-year-old tunnels, raising the prospect of a long shutdown of at least one tunnel for repairs that could cripple rail travel in the near future.

“Closure of that tunnel, and the 50 percent to 75 percent reduction in capacity, would have a disastrous effect on the regional economy. That can’t be overestimated,” said Pat Foye, the executive director of the Port Authority of New York & New Jersey.

New tunnels are needed to prevent such a crisis and to allow continued economic growth, the conferees said. Rail travel across the Hudson has increased 140 percent in the past 25 years, even as auto travel has declined, and is projected to double again by 2040, according to the Regional Plan Association, which organized the conference with the Port Authority.

“This conference isn’t about transportation. It’s about jobs,” Foye said during a panel discussion. “It’s about protecting and retaining the jobs the region already has and creating the platform for future job growth. It is not an overstatement to say the region’s economic prosperity is at stake.”

But even with that looming risk and the kick in the pants from Rogoff, fundamental questions remain unanswered. Most importantly, which agency will own and direct the project? And where will the required funding, which could reach $15 billion or more, come from?

How will Christie and New York Gov. Andrew Cuomo, who are both under pressure to pay for other transportation needs, somehow agree to support such a massive undertaking? And what role will be played by the powerful but politically vulnerable Port Authority, which needs to spend billions on other projects and remains under a cloud of Bridgegate-related scandals?

Thinking inside the ‘tunnel box’

Amtrak has spearheaded Gateway planning so far and is already building a $185 million concrete “tunnel box” in Manhattan to ensure the future rail line will have access to Penn Station. The fate of the ARC project showed the risk in having a local agency run a huge project of national interest, so the federal rail system’s involvement is an encouraging sign, said Thomas Wright, president of the Regional Plan Association.

“Amtrak is clearly in a better position to be a major partner on this today than it was 10 years ago,” Wright said. “Some of the real mistakes that were made with ARC — and there were many mistakes made, not just the final one — were partially because Amtrak was not the active partner it really should have been in the prior generation.”

Wright said it’s not inconceivable that Amtrak could end up as the lead agency on the whole project, but Robins and other experts said they doubted it would build the tunnel on its own. It does not have the capacity, funding, or a large enough stake in the proposed rail line, given that the facility would be traversed mostly by NJ Transit trains.

The Port Authority already manages the Lincoln and Holland tunnels and would appear to be a good fit to build more of them. Chairman John Degnan has expressed new interest in helping as he seeks to restore his agency’s reputation for competence and integrity. But the authority has other extremely expensive problems, particularly the overtaxed main bus terminal in Manhattan, which could cost several billion dollars to rebuild or relocate.

Some conference participants mused about creating a new organization or coalition that could carry the project forward for the decade it would take to design and bore two new tunnels, expand Penn Station, replace the obsolete Portal Bridge over the Hackensack River, and build out other connected infrastructure.

Others, like Stephen Gardner, an Amtrak vice president who oversees development of the Northeast Corridor, said it’s more an issue of galvanizing the existing agencies to act. He said the region’s transportation community already has the expertise to advance the project to the next stage but has so far failed to step up to the plate.

“We’re about to launch an environmental impact study, but with whom? We can’t do this alone,” he said. “We need to do professional engineering on new tunnels. We need a group of people who are spending every waking moment thinking about how we’re going to get this stuff done. And we need to do it now, today, not tomorrow, not next week.”

“We don’t need new institutions to do that. We just need a commitment and a will to say, ‘Hey, we’ve got to put people and time and energy into solving this problem now,’” he said.

Rogoff stressed that local stakeholders must figure out a plan quickly, given that Obama leaves office in fewer than 20 months. Agencies are already discussing how they will work together, Wright said.

[related]“There’s some inside pool that’s going to happen now, in terms of the next steps, in terms of federal agencies defining which one’s going to take the leadership role in the environmental review process, and there are sensitive negotiations between the two states, the city, the Port Authority, the big public authorities, and the federal government,” he said after the conference.

“Those things have to be worked out, and they’ve got to be worked out this summer. Which is, as these things go, warp speed,” he said.

Wright said the Federal Railroad Administration (FRA) or the Federal Transit Administration (FTA) could soon decide between them which will take the lead on the complex environmental review process, which will help determine Gateway’s details and cost.

The FRA focuses on rail safety — it is overseeing the response to the fatal May 12 Amtrak accident in Philadelphia — and has a lead role in developing the long-range master plan for the Northeast Corridor. The FTA assists local transit agencies and was the main federal partner on the ARC project, granting design approvals and channeling funds from different federal sources.

Working the numbers

At least as cloudy as the identity of the agency that will design and build the tunnels are the sources of money to pay for the work. While Amtrak is already building the tunnel box and the federal government will likely make some grants, the experts universally agree that it will not provide the bulk of the funding.

Despite the Obama administration’s stated enthusiasm for Gateway, the Republican-led Congress has shown little interest in boosting funding for rail. After the Amtrak crash the House of Representatives actually voted to slash the agency’s budget, though it’s unlikely the Senate will support the cut.

“Washington has proven time and time again, particularly recently, that’s it doesn’t have the ability to make these kinds of strategic investments. Washington is not leading on infrastructure,” said Robert Puentes, a senior fellow with the Brookings Institution’s Metropolitan Policy Program. “There’s no big tranche of money that’s coming. There’s not going to be another stimulus package. They can’t even plug the holes in the Highway Trust Fund, which is a relatively easy problem to solve.”

“We can all just continue to pressure Congress and educate and inform them about what’s necessary, but until any evidence to the contrary, I think it’s a waste of time,” he said. “Sorry.”

Puentes said innovation on major transportation projects across the country has instead been coming from the “bottom up,” particularly from cities and metropolitan areas. But locally there’s little sign of that happening for the Gateway project.

“People are talking about New York and New Jersey contributing. For New Jersey to contribute and likely participate, it has to have to its transportation capital program in order. That is exactly what it does not have,” Robins said. “So we are behind the eight ball on that.”

The Christie administration has so far declined to support a hike in the gas tax to replenish the state’s Transportation Trust Fund. Instead it has cobbled together several controversial sources of cash to extend the fund for a year, including repayment of a loan made to NJ Transit, which will in turn raise fares by about 9 percent later this year.

New York, meanwhile, is far more concerned about finding money for the Metropolitan Transportation Authority and other needs than helping New Jerseyans commute to Manhattan.

“New York is generally uninterested in contributing to these kinds of projects,” Robins said. “There’s only been one project that we know of that it contributed to in recent history and that was the Secaucus Junction project. So they are not racing to come forward. On top of all that, there are now $14 billion of MTA capital program requests unaddressed in the New York budget.”

“It’s very hard to see how the MTA is going to jump into this and be a major participant. So there are lots and lots of issues,” he said.

In the past Christie has said New York and the federal government should help pay for new tunnels, and he said essentially the same thing again after last month’s conference. “The governor has always recognized the need for additional trans-Hudson rail capacity. That includes being open to any plan that is well-engineered but also fair and equitable to New Jersey — with costs shared between all benefiting jurisdictions,” his office reportedly said.

In other states and countries, corporations or even philanthropies have helped fund successful mass transit projects, but no such support has materialized for the Gateway so far.

A portion of the trans-Hudson summit was dedicated to discussing public-private partnerships, in which private firms invest in infrastructure projects, but it is not clear how they could make any money from Gateway. Typically, profits would come from a fee on riders, but NJ Transit is already hiking fares and cutting expenses just to meet its operating costs.

“If [the] summit was any indication, paying for the tunnel is an unsolvable problem, at least for now,” Nicole Gelinas, a fellow at the Manhattan Institute, wrote after the conference.

In a sense, however, money is less pressing of an issue than planning and leadership. Not only is the major spending at least a few years away, but the federal government also offers two relatively low-cost borrowing programs, Railroad Rehabilitation and Improvement Financing (RRIF) and Transportation Infrastructure Finance and Innovation Act (TIFIA), that could provide initial funding and be paid back over decades.