Corporation OK’d to Oversee New Hudson Rail Tunnel

Officials in NY and New Jersey announced an agreement Thursday to create a corporation to oversee plans to build a new rail tunnel under the Hudson River, though basic questions remain about how the estimated $20 billion project will be paid for.

The century-old rail tunnel used now by Amtrak and New Jersey Transit is deteriorating and was damaged by Hurricane Sandy.

“My interpretation of that, my reading of that agreement, would be that 50 percent when it’s all said and done, not 50 percent of what’s projected to begin with”, said Wisniewski, D-Middlesex. Chris Christie of New Jersey and Andrew Cuomo of NY proposed this summer.

Under the agreement, an entity will be created within the Port Authority of NY and New Jersey. The corporation will include the states of NY and New Jersey, the U.S. Department of Transportation (USDOT) and Amtrak as members and will be established and chaired by PANYNJ. In addition to the tunnel, Gateway envisions an expansion of Penn Station in NY, a new bridge in New Jersey to replace a 105-year-old bridge that is a frequent source of delays and expanded track capacity, among other improvements. The federal share of funding for the project is likely to come from a combination of New Starts Grant dollars, Amtrak Northeast Corridor profits, Amtrak capital funds, annual appropriations, and other similar federal sources.

That will be aided by the establishment of the Gateway Development Corp., an agency that will be established under the Port Authority.

Financing experts say a few level of public-private partnership also is possible, though that could require user fees, congestion pricing or fare increases to pay back private investors. A Port Authority member will chair the board, and an Amtrak representative will serve as vice chair.

Coscia, a partner with Windels, Marx, Lane & Mittendorf, said that, as the project progresses, each stakeholder will be looking at “independent efforts to raise money and things that they’ll do collaboratively with each other”.

The Port Authority will provide primary support staff for the corporation as well as office space, administrative, technological and logistical support. “Amtrak looks forward to working with all stakeholders to establish this new entity and to preserving and expanding the vital Northeast Corridor rail link that serves as a foundation for the region’s economy”.