Judge: Gateway Tunnel work can continue
Trump loses bid to halt $16B project
By: Colleen Wilson
NorthJersey.com
USA Today Network - New Jersey
NEW YORK - A federal judge granted New York and New Jersey's request to lift the suspension on federal funding for the $16 billion Gateway rail tunnel project under the Hudson River on February 6, [2026] the same day construction was due to stop indefinitely.
..... The decision was issued Friday [02/06/2026] evening by Jeannette Vargas, just horus after teh fedeal judge heard arguments in the case at the U.S. Distinct Court in the Southerern Districtin New York.
..... Without this decision, Vargas wrote the states "would suffer irreparable harm" and would have "no means to recoup" the dollars being spent on unexpected expenses need to take care of the equipment and materials and to sure the various tunnel constriction sites during the project's pause.
..... "The order issued this evening [02/06/2026] should ensure tat nearly 1,000 workers will be able to keep their jobs and continue their work on the tunnel, preserving the investment New Jersey and New York have made in this project and preventing further economic damage to our states, while next steps in the case play out," Jennifer Davenport, the acting attorney general of New Jersey, said in a statement.
..... Letta James, the attorney general of New York, agreed.
..... "This is a critical victory for workers and commuters in New York and New Jersey," James siad in a statement. "I am grateful the court acted quickly to block this senseless funding freeze, which threated to derail a project our entire region depends on."
..... The request was made earlier this week [02/03/2026] - and sought
fast intervention from the court, because workers at the five active construction sites in New Jersey, New York and in the middle of the Hudson River were preparing to stop construction and nearly 1,000 laborers were expected to be laid off.
..... Construction was on pace to stop because the Gateway Development Commission, the bistate agency overseeing the $16 billion tunnel constriction program, ran out of money Friday, [02/06/2026 four months after the Trump administration paused
reimbursements need to pay for materials, workers and contracts.
..... Vargas was unswayed by arguments made by Tara Schwartz, an assistant U.S. Attorney representing the federal government.
.....
Schwartz said he states would not be harmed from delays in construction and said they could contribute money to pay for unexpected expenses during litigation, which they could recoup from the federal government later if they prevailed in court.
..... Vargas interrupted, noting the law prevents the states from doing just that and the states may not have other legal avenues to recover unexpected costs.
..... "How would they recover?" Vargas asked during the hearing, "Money you can't get back can be irreparable harm."
'Multiple harms'
..... Vargas' decision in favor of the states is considered "extraordinary and drastic," her opinion said.
..... In order to qualify for this decision from the court, New
York and New Jersey's lawyers had to persuade Vargas that they were likely to succeed, will suffer "irreparable harm" without this intervention, that the harm tipped in their favor, and the decision was in the public interest.
..... Jeremy Feigenbaum, the solicitor general for New Jersey, and Shankar Duraiswamy, the state's deputy solicitor general, argued that both states "would absorb multiple harms" beyond dollars if the projects were paused.
..... "We incur irreparable harms thorough delays itself," Duraiswamy said.
..... This includes the possibility of contractors backing out of the project because of tits unpredictability, shoring up a workforce in specialized crafts after they're been laid off, and NJ Transit an Amtrak rail rides on the busies stretch of passenger rail in North America being force to rely on a 116-year-old tunnel long over due for substantial rehabilitation, he said.
..... In addition to the constriction of a new two-track tunnel beneath the Hudson between North Jersey and Manhattan Penn Station, the 15-year construction program would, pay to repair the century-old one.
..... if the Trump administration does not release the funds, Davenport vowed to continue fighting.
.....
"The Trump administration must drop this campaign of political retribution immediately and must allow work on this vital infrastructure project to continue. If not, I pledged to keep fighting in court on behalf of all New Jerseyans." Davenport said.
A second lawsuit
..... The Gateway commission which also used the trump administration in a separate lawsuit this week [02/03/2026] in the U.S. Court of Federal Claims, said they are owed more than $205 million from unpaid reimbursements they've sought since September 30. [2026]
..... The commission estimates it could cost around $20 million a month in unexpected costs to wind down the project sites and secure them.
..... New York and New Jersey also help pay for the commission's operating costs, which went up substantially in 2026 because of interest payments on the $500 million credit facility the agency tapped in October [2025] after the U.S. Department of Transpiration (DOT) froze the federal reimbursements.
..... Gateway's financing expenses are expected to increase to $30 million this year, up form 417 million last year, [2025] due to the loan.
..... "These costs are a direct and foreseeable consequences of DOT's contractual breach and would not have been incurred had DOT met its payment obligations under the (Hudson Tunnel Project) Grant and Loan Agreements. These additional costs total $156 million until HTP's planed in service date in 2038, the lawsuit filed by Gateway said.
..... President Donald Trump offered last month to drop his hold on funding for the tunnel project in exchange for Democratic Senator Chuck Scumer supporting the renaming of Washington Dulles Airport and New York Penn Station after Trump, according to multiple media reports this week. [02/05/2026] Schumer told the White House he did not ahve the pwoer to rename the landmarks.