The Gateway rail tunnel project that will connect New York and New Jersey has just received an initial $30 million in federal reimbursements, ending a funding freeze that halted construction. Project officials say the remaining roughly $205 million is expected next week, but work remains paused while they coordinate how to apply the money.
Why the funds were frozen
In September 2025 the U.S. Department of Transportation announced it would indefinitely suspend payments for the Hudson Tunnel Project pending a review of regulations governing contracting with disadvantaged business enterprises. The states of New York and New Jersey challenged that suspension in federal court, arguing the money had already been appropriated by Congress and committed by contract.
Legal intervention
U.S. District Judge Jeannette A. Vargas issued a temporary restraining order on February 6, blocking the DOT’s suspension and allowing a brief administrative delay while the government sought emergency appellate relief. The judge also ordered the Trump administration to file a status report by 3 p.m. On Tuesday regarding the transfer of the funds.
Current status
A project spokesperson confirmed receipt of the $30 million and said construction remains on hold while officials work with contractors to deploy the funds and bring workers back as quickly as possible. The U.S. Department of Transportation has stated it is following the court order.
Potential next steps
If the additional $205 million arrives as expected, the Gateway Development Corporation may be able to resume construction and mitigate the cost overruns warned about by state officials. Conversely, any further legal challenges to the DOT’s review process could trigger another pause, extending delays and increasing expenses.
Frequently Asked Questions
How much money was released to the project?
The project received an initial $30 million installment, with about $205 million expected to follow next week.
What caused the funding freeze?
The U.S. Department of Transportation announced an indefinite suspension of payments pending a review of regulations related to contracting with disadvantaged business enterprises.
What legal action has been taken to address the freeze?
U.S. District Judge Jeannette A. Vargas issued a temporary restraining order on February 6 that blocked the DOT’s suspension and required a status report from the Trump administration on the transfer of funds.
How do you sense this funding hiccup will affect the overall timeline of the Gateway tunnel project?
