Explainer: Why Hudson River Tunnels Are So Badly Needed and so Long Delayed

Meir Rinde | November 8, 2016 | Explainer
Devastating commuter delays and economic hardship just might be avoided if construction of a pair of new tunnels under the Hudson gets going

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The $24 billion project to build two new rail tunnels under the Hudson River and improve related infrastructure on Amtrak’s Northeast Corridor is slowly moving ahead.

New details of the tunnel plan were recently released, and open houses on the proposal will be held November 10 at Secaucus Junction Rail Station and November 17 in New York. Last month officials said the project has been declared eligible for billions in federal funds and was added to a federal program meant to speed up the permitting process. They say construction work could begin in 2018 or 2019 and take seven years.

Yet six years after Gov. Chris Christie canceled the earlier ARC project under the Hudson, and more than a year after electrical problems in the existing tunnels caused lengthy train delays, many details of the new project still have to be worked out, including how it will be paid for.

What’s needed: A pair of new tunnels are needed under the Hudson River, running between North Bergen and Penn Station, to supplement the existing, 106-year-old tunnels used by NJ Transit and Amtrak trains. The current tunnels have long been overtaxed as NJ Transit ridership has grown, and as part of Amtrak’s main artery on the east coast — the one rail line that consistently turns a profit — have created havoc due to persistent delays.

These problems turned into an immediate crisis when the tunnels were scoured by seawater during Superstorm Sandy in 2012, and electrical problems in summer 2015 led to lengthy commuter delays and a public outcry. Amtrak, which owns the tunnels, says they are at risk of failure and are overdue for a lengthy closure and overhaul. New tunnels would allow trains to continue to run during repairs, preventing an economically devastating disruption of the commute. The tunnels support some 200,000 daily train passengers.

How we got here: The tunnels are central to Amtrak’s 5-year-old Gateway plan, which calls for replacing the Portal Bridge near Secaucus Junction station, expanding Penn Station in New York, and other improvements on the Northeast Corridor. It ultimately aims to double train capacity under the Hudson River. Construction of a concrete tunnel box at Hudson Yards in midtown Manhattan began in 2013, but until recently there was little sign of progress on the full tunnels.

Then in June 2015, a top transportation official in the Obama administration attended a summit in New York and called the building of the new tunnels the nation’s “most important rail project.”

The following month, the failure of decaying electrical cables in the existing tunnels caused major train delays, angering commuters and raising fears of a disastrous tunnel shutdown. Under political pressure, Christie and New York Gov. Andrew Cuomo — who for years had largely ignored the project — began discussions with the federal government on how to move it forward.

Who’s in charge? One major unknown has been which agency will build and own the new tunnels. Amtrak doesn’t have the capacity to do it on its own. NJ Transit will be the main user of the tunnels, but advocates fear that putting the agency in charge would allow the state to suddenly cancel the project, as Christie did with the earlier ARC tunnel.

The Port Authority of New York & New Jersey already owns bridges and tunnels and has substantial experience overseeing major construction programs. But it is overwhelmed with other huge, expensive obligations, including new bridges, a new Manhattan bus terminal, and the World Trade Center redevelopment, and is politically compromised by Bridgegate and other scandals.

Following on a recommendation by Sen. Charles Schumer (D-NY), a Gateway Development Corporation is in the process of being formed by the two states, the Port Authority, and the U.S. Department of Transportation. Currently NJ Transit and the Federal Railroad Administration are leading the environmental impact statement process required before construction can begin, and Amtrak is designing the tunnels.

The cost: An official figure has not been released, but a preliminary estimate pegs Gateway’s cost at $24 billion, including $7.7 billion over 10 years to build new tunnels and renovate the old ones. The new Portal Bridge is expected to cost $1.5 billion. Expanding Penn Station could run $5.9 billion, a second Portal Bridge South $1.9 billion, and renovating Secaucus Junction station $1.8 billion, though those numbers are very rough estimates.

Last fall Christie and Cuomo assumed a $20 billion cost for Gateway and proposed splitting the cost between the states and the federal government, an idea the Obama administration welcomed. Port Authority contributions are considered part of the states’ portion.

How to pay for it: Relatively small amounts are already being spent. Amtrak has spent $235 million in Sandy recovery funds on the Hudson Yards tunnel box, and $70 million has been authorized for initial engineering work on the tunnels, with half coming from the Port Authority and half from Amtrak. Amtrak is also funding NJ Transit’s work on the federal environmental review.

The billions more needed to bore the tunnels and complete Gateway will likely come from a variety of sources as they are needed. In July USDOT announced that the Hudson Tunnel and Portal Bridge projects are eligible for the federal New Starts program, which had pledged $3 billion for the old ARC project and could provide more for Gateway, pending congressional approval of the federal budget.

Long-term, a likely financing source is the $35 billion federal Railroad Rehabilitation and Improvement Financing (RRIF) program, which provides low-interest loans that are paid back over 35 years. On the federal side, Amtrak will help to pay for elements of Gateway with revenues from its profitable Northeast Corridor, and Congress may need to approve more direct funding.

New Jersey’s contribution: It’s unclear how New Jersey will pay a $5 billion to $6 billion share, given NJ Transit’s serious maintenance needs, the pension crisis, calls for higher education funding, high existing state debt, and other fiscal demands. Senate President Stephen Sweeney (D-Gloucester) has said a 35-year, $3 billion loan to New Jersey would cost the state a manageable $130 million a year, but that might not cover the state’s total costs.

Some suggestions have been offered for ways to raise more revenue, such as adding an additional fee on train trips under the Hudson River that would be akin to bridge tolls. Higher ticket prices are likely to be very unpopular, however. An NJ Transit fare increase averaging 9 percent drew howls of protest when it was approved last summer, and the agency says it hopes to avoid additional increases for at least two years.

Upcoming activities: NJ Transit recently released a new fact sheet describing its “preferred alternative” for the tunnels’ route. Detailed information is available at the project’s website, Hudsontunnelproject.com, and project staffers will be on hand to answer questions at public information open houses scheduled for November 10 and November 17. An environmental impact statement is being prepared and will be released for public review next summer, with a federal ruling on it expected by spring 2018.