Construction on Gateway Tunnel to Restart After Feds Release Funds

The $16 billion project to replace a century-old Hudson River rail tunnel will resume work this week, bringing back 1,000 laid-off laborers.

Published on Feb. 24, 2026

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Construction on the Gateway Tunnel rail project in New York and New Jersey will likely resume on Wednesday after a nearly month-long pause, the Gateway Development Commission (GDC) announced. The restart comes after the Trump administration was forced by a court order to send $235 million in reimbursements that had been withheld since October. The project, which will replace a 116-year-old tunnel connecting the two states, had laid off 1,000 workers when construction halted in early February.

Why it matters

The Gateway Tunnel project is critical infrastructure for the Northeast region, with hundreds of thousands of commuters relying on the existing century-old tunnel daily. Completing the new tunnel is seen as vital to the region's economy, and the month-long pause had raised concerns about further delays and cost overruns.

The details

The GDC said construction will resume with preparations to launch the first of two tunnel boring machines, assemble the machine in New Jersey, and get ready for delivery of the second machine. However, the commission still needs to secure the remaining $15 billion in federal funding, including $11 billion in grants and $4 billion in loans, to fully finance the $16 billion project.

  • Construction was paused on February 6, 2026.
  • Construction is scheduled to restart on February 26, 2026, pending snow removal from a recent blizzard.

The players

Gateway Development Commission

The entity leading the Gateway Tunnel rail project, which will replace a two-tube tunnel connecting New York and New Jersey below the Hudson River.

Molly Beckhardt

A spokesperson for the Gateway Development Commission.

Alicia Glen

The New York commissioner and co-chair of the Gateway Development Commission.

Letitia James

The New York Attorney General who, along with the New Jersey Attorney General, successfully petitioned a court to order the release of federal funds for the project.

Jennifer Davenport

The New Jersey Attorney General who, along with the New York Attorney General, successfully petitioned a court to order the release of federal funds for the project.

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What they’re saying

“Hundreds of workers will return to GDC's construction sites in New York and New Jersey. This is great news for these workers, the hundreds of thousands of riders who take the train to New York City every day, and the entire region.”

— Alicia Glen, New York commissioner and co-chair, Gateway Development Commission

“We cannot take our eyes off the ball. We need every federal dollar accounted for in our grant and loan agreements to build this tunnel.”

— Alicia Glen, New York commissioner and co-chair, Gateway Development Commission

What’s next

The Gateway Development Commission says two major procurements for the project will remain on hold until the commission gains full access to the remaining $15 billion in federal funds, including $11 billion in grants and $4 billion in loans.

The takeaway

The restart of construction on the Gateway Tunnel project is a significant milestone, but the commission still faces the challenge of securing the full federal funding needed to complete this critical infrastructure for the Northeast region.