No clear path forward for New York-New Jersey Gateway program

Key View

• Opposition to the Gateway Program from the Trump Administration is set to remain a major impediment to the rail project’s advance through to the end of 2020.
• Without federal funding, we do not expect the project will advance at its planned scale, with the New York and New Jersey states likely to look for less expensive alternatives.
• The Trump Administration’s failure to support the project raises questions around its commitment to advancing infrastructure development in the country.
The planned Gateway Program, an estimated USD29bn rail infrastructure modernization and replacement project focused on the Northeastern Corridor in New Jersey and New York, is facing substantial uncertainty in light of the Trump Administration’s unwillingness to provide federal funding for the project. An agreement
announced in 2015 under the presidency of Barack Obama would have seen the federal government pay half of the costs of the Gateway Programme, which includes several projects including the replacement of the aging Portal Bridge in New Jersey as well as the construction of two new rail tunnels under the Hudson River between New York and New Jersey, needed to allow for critical repairs two existing tunnels which are at risk of failing due to their advanced age and damage sustained during Hurricane Sandy in 2012 (see ‘Gateway Project Benefits From FAST Act’, 06 Jan 2016). Since coming into office in 2017, however, the Trump Administration has taken a number of actions with the effect of preventing the advance of the project. In 2017, the administration sent a letter to Governor Andrew Cuomo of New York and then-Governor Chris Christie of New Jersey indicating that the administration would not respect the Obama administration’s funding pledge. Under the Trump Administration, the Federal Transit Administration (FTA) has lowered its priority rating for the project to ‘medium-low’, a decision most recently confirmed in March 2019. Budgets passed under Trump’s presidency have failed to include additional funding for the project, while the FY2020 budget proposal released by the Trump Administration in March 2019 in fact includes a cut to the existing Gateway Project Fund from USD650mn down to USD325mn.