The Gateway Tunnel to New York City will now cost $2 billion more. Officials blame inflation.

The cost of building the two new tubes Gate tunnel Between New York and New Jersey—and to rehabilitate the existing tunnels that are now 112 years old—raised as much as $16 billion, which officials from the agency that built them blamed on inflation and supply chain issues.

That cost is about $2 billion more than the estimated cost of $14 billion in August 2021, which included $12.3 billion in construction, rehabilitation and financing costs, said officials from the Gateway Development Commission, the two-nation agency tasked with building the tunnel.

The project schedule has also been pushed back, with a federal funding agreement expected in the spring of 2024 to be signed, and major construction to begin on the new tunnel by the fall of 2024, officials said with an updated financial plan released late Wednesday.

Last year, officials expected to receive a federal grant in late 2022 Construction begins in the summer of 2023.

The new schedule anticipates a project completion date in 2038, with the new Hudson River tunnels operational by 2035. It also estimates a 3-year schedule for the full rehabilitation of the existing 112-year-old tunnel, which will be closed one at the time of construction, so that three tubes will be On duty at all times, officials said.

“This work represents a comprehensive look at our estimates and assumptions, including the hyperinflation that has affected the global economy,” said Balpret Grewal Virk, New Jersey commissioner and co-chair of the GDC.

The last financial analysis was a full audit led by GDC, along with third-party auditors from cost estimating firm Turner and Townsend and financial advisor Ernst and Young, the two states and Amtrak. GDC officials said the team revised and “reconstructed” existing estimates to account for “large increases in inflation over the past year” and into the future, and revised drivers’ current expectations to account for schedule changes.

GDC officials said they will seek additional federal grants through The Biden Administration Infrastructure Act Signed last November, which could cut the two state quotas and federal infrastructure loan financing costs expected to be used for the local quota.

With a greater mix of federal grants, GDC officials said, the project cost could be reduced to $14.7 billion for the new Hudson Tunnel and to rehabilitate the 112-year-old tunnels.

If that number sounds familiar, that’s because it was The high estimate of a previous project, the area’s primary tunnel access and deep cave station It was canceled by former Governor Chris Christie in October 2010. Christie scuttled the project after federal officials said the state would be responsible for paying costs higher than the estimated $9.8 billion.

A financial report from the Federal Transit Administration estimated costs could be as high as $14.7 billion for ARC, prompting Christie’s to cancel it to spare taxpayers the potential expense. ARC was considered by some experts to be a flawed design because it did not connect to the Pennsylvania station in New York, but went to a two-level, four-lane station to be built deep into Manhattan’s 34th Street.

“My administration remains determined to continue reforming New Jersey’s public transportation and infrastructure, a critical endeavor that has been repeatedly delayed by my predecessors,” Governor Phil Murphy said in a statement. “Now that we are very close to turning our vision into reality, we must devote all necessary resources to completing these important projects.”

“We will continue to work to mitigate these costs and speed up aspects of the project, but most importantly we now have a way forward, working alongside the federal government, which provides the 21st century rail infrastructure for our region,” said Chris Coloury, CEO of GDC. our nation, and millions of knights.”

In June, New York Governor Cathy Hochhol and Murphy Signing a 50-50 split agreement between the federal government and the two states For the tunnel project and a similar funding split for the Portal North Bridge, construction has begun. This agreement pushed the Gateway Program into its next phase, detailing the parties’ responsibilities with respect to delivery of the Hudson Tunnel Project and moving forward with a federal project review.

The tunnel project was postponed during the Trump administration, which at one point happened He threatened to shut down the government by vetoing the federal budget containing the funding For Gateway in 2018. In March 2021, GDC and tunnels He warned that federal delays have increased the project’s cost by $300,000due to higher material and labor costs.

“As we have expressed for many years, the cost of delaying such major projects is significant and reinforces why we cannot let another day go by without building an essential piece of infrastructure that connects 20% of our national economy,” said Brian Fritsch, Building Gate Now Alliance Campaign Manager..

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