The agency overseeing construction of the $16 billion Gateway rail tunnel linking New York and New Jersey has filed a lawsuit against the Trump administration, arguing that a federal funding freeze could bring one of the country’s largest infrastructure projects to a standstill.

The Gateway project is designed to create a new rail passage beneath the Hudson River for Amtrak and New Jersey Transit. Officials say the work must be completed before repairs can begin on the existing tunnel, which is more than a century old and has suffered long-term damage from saltwater exposure. Project leaders warn that construction will be halted on Feb. 6 if federal funding is not released, and officials from both states have pressed the administration to allow the money to flow.

In a statement issued late Monday, the Gateway Development Commission said it has filed a breach-of-contract lawsuit in the US Court of Federal Claims, though court records confirming the filing were not immediately available.

“Despite its contractual commitments to fund the project, the federal government has suspended the release of its contractually obligated funds since October 1, 2025,” the commission said in the statement. “The lawsuit makes clear that the shifting explanations the administration has provided for this breach are plainly unlawful.”

Representatives for the US Department of Transportation and the White House did not immediately respond to inquiries seeking comment.

The Trump administration is currently holding back roughly $18 billion allocated to public transportation projects in jurisdictions led by Democratic mayors or governors. Those projects include New York City’s Second Avenue subway extension into Harlem and planned transit upgrades in Chicago. In October, the Transportation Department said it was examining whether the projects comply with a new policy prohibiting race- and sex-based contracting requirements.

Transit agencies say they have already submitted documentation demonstrating that their projects meet the new standards, but the funding has still not been released. The Metropolitan Transportation Authority, which operates New York City’s transit system, needs federal support to finalize an agreement within the next several months to renovate an existing tunnel along Second Avenue, according to Jamie Torres-Springer, the MTA’s president of construction and development, who spoke Wednesday.

Completion of the new Hudson River tunnel, along with rehabilitation of the current one, is expected to significantly increase rail capacity, cut down on chronic delays, and allow more Amtrak and New Jersey Transit trains to enter and exit Manhattan. Gateway officials describe the tunnel as a critical transportation artery, carrying 450 trains and tens of thousands of passengers through the corridor each day.

A shutdown of construction would mark another serious blow to a long-running effort to relieve congestion on the Northeast Corridor. In 2010, New Jersey Governor Chris Christie canceled an earlier tunnel proposal known as Access to the Region’s Core, or ARC, arguing at the time that the state could be left responsible for potential cost overruns.

{Matzav.com}