Feds clear Gateway bridge for funding — but not tunnel

The blur of a train hurtling along a bridge. | Politico

The Trump administration announced late Monday that it had deemed the Portal North Bridge project eligible to receive federal funding, while again ruling that the related Hudson River rail tunnel had not met the criteria required to receive grant money.

The new ratings for the two major Gateway Program projects, issued by the Federal Transit Administration following the release of President Donald Trump’s proposed budget, offer the first evidence in years that the long-stalled initiatives could see action under the current administration.

“Make no mistake about it, this is the most significant step forward for the Gateway Program since this Administration took office,” Sen. Bob Menendez (D-N.J.) said in a statement, saying the step required overcoming “unprecedented political opposition.”

Both projects have faced a series of setbacks under Trump, whose transportation department abandoned an Obama-era agreement to split the cost of the work with the states of New York and New Jersey.

The resulting delays in federal funding — and in issuing permits to start work on the proposed tunnel — have left Amtrak riders and New Jersey commuters to contend with frequent break-downs caused by the existing, century-old bridge and tunnels. Both two-track crossings are lynchpins in the Northeast Corridor, the busiest stretch of railroad in the Northern Hemisphere, and carry more than 450 trains and some 200,000 passengers daily.

The new “medium-high” rating for Portal North, a $1.7 billion replacement for the bridge over New Jersey’s Hackensack River, does not on its own guarantee federal funding for the work. Federal transportation officials will still need to approve the application, under the Core Capacity grant program.

But the upgraded rating does show the bridge project, sponsored by New Jersey Transit, may no longer be politically linked to the $12.1 billion tunnel project, which is said to be stalled in part because of a dispute between the White House and officials in the New York region.

The FTA on Tuesday again issued a “medium-low” rating to the tunnel project, still making it ineligible for federal funding — even if lawmakers can negotiate a budget that provides more money to the project. That project is seeking grant money under DOT’s New Starts program.

Senate Minority Leader Chuck Schumer, who has clashed with the president over funding the work, was muted in his response — remaining, like others, still concerned about the fate of the tunnel.

“Transportation across the Hudson is vital to the New York, New Jersey and the entire Northeast economy,” Schumer said. “This is a good first step, but of course we have to do much more.”

But for New Jersey officials, progress on the bridge marked a significant victory.

Officials in Trenton portrayed the decision by the FTA as one of the most significant public policy victories of Gov. Phil Murphy’s tenure, who took office two years ago after former Gov. Chris Christie — the head of Trump’s transition team and an early supporter — was unable to convince the president to fund the project.

In a statement, Murphy said the decision “puts us one step closer toward our ultimate goal: replacing this unreliable, century-old bridge and reducing delays for NJ TRANSIT customers.”

“New Jersey remains ready and willing to work cooperatively as a full partner to ensure that this project, which affects the commutes of tens of thousands of our residents daily, is completed as expeditiously as possible,” Murphy said.

The existing Portal Bridge is now 109 years old and, like the nearby Hudson River tunnels, is in dire condition. Most of the major problems involving the bridge occur when the span is swung open to allow boats to pass by on the Hackensack River below. The bridge can become stuck in the open position, blocking all trains on the Northeast Corridor until workers wielding sledgehammers manually swing the bridge back into position.

Changes in maritime traffic and stop-gap changes to when the bridge can be opened have largely alleviated the issues — at least during peak travel periods. But the project was still seen as critical and urgent.

The new rating for the bridge comes after the Murphy administration took a number of steps to improve its application, including putting more “skin in the game” by having NJ Transit agree to borrow up to $600 million to contribute to the local share of the work.

In its latest funding application, which sought $811 million in federal grant money, New Jersey said it would pay for its share of the project by borrowing $555 million, dedicating $187 million from New Jersey Turnpike revenue and earmarking another $40 million from its Transportation Trust Fund, which is supported by the state’s gas tax. It also added a new cushion for cost overruns.

The FTA said in its new rating that it agreed to upgrade the projectone level because the federal share is now “less than 50 percent of the total cost.”

“The overall rating for the project improved to Medium-High because NJ Transit took important steps, that were recommended by FTA staff, to improve the project’s financial plan,” an FTA spokesperson said Tuesday morning.

NJ Transit expects to start engineering for the work this year and hopes to receive a full funding agreement in late 2020 to complete the work in 2026.

The much-more-expensive tunnel — the biggest piece of the overall $30 billion Gateway Program — seems a different story.

In August, the tunnel’s backers — New Jersey, New York and Amtrak, led by the bi-state Port Authority — submitted a revised application they said addresses many of the problems raised in a rating released in March. Thanks to what tunnel developers describe as more refined engineering, they said the estimated cost of rehabilitating the existing tunnel and constructing the new one dropped from $13.7 billion to $12.1 billion.

The states also passed legislation last year creating the Gateway Development Commission, addressing a complaint by federal officials that the project had not previously had a sponsor. The Port Authority is temporarily filling that role.

The total requested federal grant fell from $6.8 billion to $5.3 billion, reducing the share from 49.4 percent to just 44 percent.

Still, the FTA said the project did not meet funding requirements because its financial plan is rated “low.”

The agency faulted the application for, among other things, relying on “planned or unspecified” funding sources. That primarily includes the use of federal loans from the Railroad Rehabilitation and Improvement Financing program — a large, untapped pot of money designed specifically to support major railroad projects like Gateway.

“Despite direction from the Department on how to fix the Tunnels’ application, the project sponsors continue to ignore these suggestions and the rating did not change,” the FTA spokesperson said. “The Hudson Tunnel project received a medium-low rating because the proposed project assumes unprecedented and unrealistic amounts of taxpayer funding; leaves unspecified the sources of funding to repay three of the four USDOT Railroad Rehabilitation and Improvement Financing (RRIF) loans assumed in the financial plan.”