Wall Street Credit-Rating Agency Makes Economic Case for New Portal Bridge

With federal matching funds still not granted for replacing key Northeast Corridor crossing, Moody’s suggests new bridge necessary to ‘avoid regional economic disruption’

Artist's rendering of new Portal North Bridge
The importance of federal funding for the Portal Bridge — a key element of the upgrade to the rail crossing between New Jersey and New York — is underlined in a new Wall Street report. The report also suggests that without it, the region and nation could lose out economically.

The report, from Moody’s Investors Service, a Wall Street credit-rating firm, highlights the role of mass transit in the Northeast Corridor economy and suggests New Jersey’s decision to boost funding for the replacement of the vital Northeast Corridor rail crossing should increase the chances of it receiving long-sought federal aid.

Issued yesterday, the report comes as state officials are waiting to hear whether the Trump administration is ready to authorize federal matching funds for a long-planned replacement of the Portal Bridge. Located near Secaucus Junction, the century-old bridge is crossed by nearly 200,000 commuters daily but is prone to breakdowns that can grind the region’s mass transit to a halt.

The project to replace the bridge is part of the broader infrastructure-renewal program known as Gateway. Federal funding for other elements of that program, including for a new trans-Hudson rail tunnel is also uncertain.

Moody’s didn’t change the credit rating of the state or of New Jersey Transit yesterday, but the report suggests the region — and the nation as a whole — could have much to lose if infrastructure funding remains stalled.

Bridge has mechanical problems

“While improving reliability of existing service levels is important to stabilizing ridership and revenues, significant long-term population and economic growth will require expanding the region’s existing transit capacity,” Moody’s said.

The current Portal Bridge when open
Opened in 1910 for the Pennsylvania Railroad, the Portal Bridge is now owned and operated by the federal government and used regularly by Amtrak and NJ Transit. The bridge spans the Hackensack River, but it sits close enough to the water that it has to be swung open to allow for passing maritime traffic. Federal officials say the bridge is still safe, but it is prone to mechanical problems, including getting stuck in the open position, a predicament that can bring the region’s rail traffic to a halt.

The proposed replacement would be the $1.5 billion “Portal North Bridge,” a high-level, fixed-span bridge that would raise the two-track crossing more than 50 feet above the river, obviating the need for it to open. Federal and state officials have said the replacement would increase passenger capacity by an estimated 10 percent and allow trains to cross the river more quickly and more reliably.

Pre-construction work on the Portal North Bridge has already begun, and last year, Gov. Phil Murphy’s administration approved spending $600 million in state bond revenue on it, nearly doubling the state’s previous funding commitment. That came after the Trump administration raised concerns that the state had not put up enough of its own resources to qualify for federal grant assistance.

A final decision on the federal funding for the bridge could come from the Trump administration later this month, but the ongoing federal government shutdown may end up delaying the approval process.

Avoiding regional disruption

When weighing in, Moody’s said the replacement bridge would “improve rail system reliability on the Northeast Corridor” and provide a way to “avoid regional economic disruption.”

The report also stressed the economic impact of the broader Gateway initiative, which too has been held up by concerns about federal funding.

A preliminary financing framework that was established before President Donald Trump took office called for 50 percent of the overall cost of Gateway to be covered by the federal government, with the remaining 50 percent paid for by New Jersey, New York, and the Port Authority. But Trump’s administration has since raised questions about whether the local partners were putting up enough money, especially as some of the local matching funds would come from federally backed loans.

Credit: Wikimedia Commons
U.S. Rep. Tom Malinowski (D-7)
While lawmakers led by U.S. Rep. Tom Malinowski (D-7) have introduced legislation to clarify that such loans can be used as local matching funds, it remains to be seen whether enough money will be approved by the full Congress and signed into law by Trump to advance Gateway. And beyond funding concerns, state officials are also awaiting a “Record of Decision” from the Trump administration that would allow for the Hudson River tunnel project to advance.

The Moody’s report highlighted the impact that mass transit has on the economy of the entire Northeast Corridor between Boston and Washington, D.C., which produces an estimated 20 percent of the nation’s total gross domestic product (GDP).

‘Critical component’ of economic health

“Transportation infrastructure is a critical component of the economic health of a region,” Moody’s said. “It is often cited by companies when choosing locations to expand their businesses.”

The report cited cost overruns as a potential risk, but Moody’s noted the New York-New Jersey region has a strong enough economy to support the local share of the funding needed to cover the first phase of the Gateway project, which includes the building of the new rail tunnel.

“The planned $7 billion local contribution is about half a percent of the metro area’s $1.3 trillion annual personal income,” Moody’s noted.

The report also suggested improving the region’s mass-transit infrastructure could provide a much-needed boost for NJ Transit and other metro-area agencies that have experienced a decline in ridership in recent years as reliability has faltered and ride-sharing services have grown in popularity.

“With its high traffic congestion levels, ride-sharing alternatives are unlikely to ever serve as an adequate substitute for mass transit in the New York City metro area,” Moody’s said. “Thus, a robust and reliable mass-transit system remains essential to the regional economy.”

Steve Sigmund, a spokesman for the Gateway Development Corporation, the agency that is leading the infrastructure renewal effort, said the Moody’s report highlights the notion that “mobility matters.”

“Mobility and the ability to get conveniently and easily to an economic center matters a lot,” Sigmund said.

Nancy Snyder, a spokeswoman for NJ Transit, said her agency would continue to stress that Gateway is “the most urgent infrastructure project in the country” while also working with “partner agencies to improve trans-Hudson access and ensure these projects of national importance continue to advance.”