The entity building the $16 billion Gateway rail tunnel received the entire $205 million a judge ordered President Donald Trump’s administration to unfreeze, but a report to a judge said the project is owed more money.
Gateway Development Commission officials announced Wednesday that the full $205 million that had been withheld since Oct. 1, 2025 amid has been repaid by federal transportation agencies.
“We are working with our contractors to deploy these funds to resume work as soon as possible,” Gateway officials said in a statement. ”Letters will be sent to contractors today, and construction activities are expected to resume next week.”
Construction on five Gateway projects in New Jersey and Manhattan have been paused since Feb. 6 when the GDC shut down work when funding ran out. That caused the layoff of 1,000 construction workers.
Although the commission’s board has scheduled a meeting for Feb. 24, restarting construction work doesn’t need the board’s approval, said Molly Beckhardt, a commission spokesperson.
However Gateway may be entitled to more money based on a repayment status report filed with U.S. District Court Judge Jeannette A. Vargas on Tuesday.
That report said a total of $235.7 million is due to Gateway from three federal loans and three Federal Transit Administration and Federal Railroad Administration grants.
“We took him to court because I care deeply about jobs and the economy, even if the federal government doesn’t seem to,” New Jersey Gov. Mikie Sherrill, a Democrat, said after an event in Flemington.
“We have seen the funds released and he continues to remain in court — but we’re just seeing again and again that what he’s doing is illegal,” she said, about an ongoing appeal of Judge Vargas Feb. 6 order.
The $16 billion Hudson River Tunnel Project will build two new tunnels and rehabilitate the existing rail tunnels. Of that, $12 billion will come from federal sources and the remainder is funded by New York and New Jersey through low interest federal loan programs.
Boring work on the first tunnels through the Palisades in North Bergen is scheduled to start this year and the first tunnel boring machine is on the site.
A day before the second payment was made, Trump criticized Gateway on social media, calling it a “boondoggle” that will result in billions of dollars in cost overruns that the federal government won’t cover.
Sherrill placed the blame for any additional costs on Trump’s funding freeze.
“The worst part about it is now, he’s probably cost the project, which was on time and on budget, millions of dollars by halting all this work,” Sherrill said.
Under 2024 agreements with the federal government, New Jersey and New York are responsible for paying for any cost overruns and not the federal government as Trump implied.
Meanwhile, an association representing contractors said they’re ready to go back to work.
“It never should have gotten this far. It never should have gotten to a point where hard-working men and women saw their jobs put on the line,” said Dave Rible, Utility and Transportation Contractors Association CEO. “At least, we can move on and resume the necessary work of building Gateway.”
The association’s members are “ready, willing and able to get Gateway across the finish line,” he said.
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