Rail tunnel project scrambling as funding deadline looms

A $13 billion project to build a new rail tunnel into New York is scrambling to stay in the running for key federal funding as a July 14 deadline looms.

According to the federal Department of Transportation, the tunnel project, the largest component of the Gateway rail project that plans to replace century-old rail infrastructure in New York and New Jersey, is lacking some key components to remain eligible for billions in federal grants.

On Friday, officials sent a letter to DOT requesting an extension past the July 14 deadline, when the two-year project development phase is scheduled to expire.

Failure to get an extension could put the project's already tenuous financial prognosis in further jeopardy and send officials back to square one. It also would delay the start of construction, tentatively planned for late 2019.

The existing century-old Hudson River rail tunnel operates at capacity during rush hours and suffered extensive saltwater damage in 2012's Superstorm Sandy. Amtrak officials have said either of its two tubes could fail in the next 10-15 years, which would paralyze train travel between Boston and Washington, D.C.

A new tunnel would allow the existing tunnel to be repaired, with the eventual goal of having both in operation and greatly increasing capacity.

Partners in the project, including New Jersey Transit and the Port Authority of New York and New Jersey, "continue to do everything we can to advance the most urgent infrastructure need in the country, replacing an increasingly failing 108-year-old 'one track in, one track out' rail system that links 10 percent of the GDP with modern, reliable 21st century transportation infrastructure for over 200,000 riders a day," Craig Schulz, spokesman for the Gateway Development Corporation, said Friday.

Even if it receives an extension, the project can't advance to the next, engineering phase of the grant process until the DOT gives final environmental approval, Schulz said. The project submitted its environmental report to the DOT several months ago.

That approval process has been delayed by questions over whether the Gateway Development Corporation, a nonprofit entity formed to oversee the project, has the authority to apply for federal grants, according to the DOT.

While that matter is being hashed out, the Port Authority has stepped in to act as project sponsor.

The tunnel project has been at the center of a bitter debate between officials in New York and New Jersey and the DOT over funding.

In December, both states unveiled plans to pay back federal loans for half of the project, under an understanding reached with President Barack Obama that the government would pay for the other half.

Officials in the Trump administration have said no such agreement existed, and if it did, it doesn't now. In recent months they have said the two states' use of federal loans doesn't count as a local contribution to the project, even though the states will be paying back the loans.

In March, Secretary of Transportation Elaine Chao told a House committee that Trump was moving to block funding for the project because New York and New Jersey weren't putting up enough of their own money.