The U.S. Army Corps of Engineers issued a permit that will allow the Gateway Tunnel Project to proceed with construction through the Meadowlands and under the Hudson River. It was the final bureaucratic hurdle for the $12.3 billion project that will build two new tunnels and rehabilitate the exiting 111-year old tunnels. Construction is expected to start in summer 2023, once funding is secured.

“The Gateway Project receiving permit approval means commuters across the region are one step closer to faster, more reliable rail service,” said Zoe Baldwin, New Jersey Director, Regional Plan Association. “This is a great step in the right direction, and shows the federal government’s commitment to advancing this critical project. Now we need an improved financial rating from the Federal Transit Administration as soon as possible to keep the momentum going.”

The tunnel increases capacity allowing more trains to be sent to and from Penn Station, opening up access to NJ Transit lines that don’t go to New York. The tunnels are a key part of Amtrak’s high speed rail and Northeast Corridor upgrades. It would end delays due to infrastructure problems with the old tunnels built in 1910, NJ.com reported.

“This step brings us much closer to the beginning of construction on the Hudson Tunnel Project, which is part of the single-largest critical infrastructure effort in the nation,” said Gov. Phil Murphy in a statement. “I am looking forward to continuing to work with our partners in the Biden Administration, New York, Amtrak, and our Congressional delegation on completing the entire Gateway Program.”

New York Gov. Kathy Hochul said the tunnel was important for the economic vitality of New York, which produces 20 percent of the nation’s gross domestic product.

“The Gateway project will help support the economic prosperity of New York and the rest of the country for years to come, which is why we need to get this project right and get it moving,” she said in a statement.

Construction of new tunnels and rehabilitation of the existing tunnels is estimated to be completed in 2035, GDC officials said in November.
The cost stands at $10.1 billion for new tunnel construction and $2.2 billion to rehabilitate the old tunnels, for a grand total of $12.3 billion. But Gateway Development Corp officials warned that delays to the project increase the cost due to inflation.

Funding remains the next major hurdle. The project’s ranking needs to be raised by the Federal Transit Administration to qualify for federal grants. The tunnel project had received a low rating under the Trump administration that precluded it from qualifying for federal funding.

Railroad and other infrastructure loans that would comprise New Jersey and New York’s share of the project also need to be applied for and approved.

The states received a boost from recent changes to those programs that allow the loans to be paid off over 75 years, considering the lifespan of major railroad infrastructure projects, instead of an original 35-year payback period.